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PLS HELP WITH PART D!!!! After attending a seminar on measuring customer profitability, Mason Ford decided to examine Olson Optics customers to determine if the
PLS HELP WITH PART D!!!!
After attending a seminar on measuring customer profitability, Mason Ford decided to examine Olson Optics customers to determine if the company truly knew how profitable its customers were. Olson Optics already uses an activity-based costing system to determine the product cost of its two products: RF30 and LF45. Each RF30 sells for $17 and requires $7.80 in direct materials and $5.00 in direct labor. Each LF45 sells for $45 and requires $17.00 in direct materials and $13.40 in direct labor. The following table provides cost and activity information for manufacturing overhead for the two products Number of Activities Activity Cost Pool Cost Driver RF30 Manufacturing Overhead Costs $187,500 LF45 Total Packing Cartons 250,000 625,000 375,000 10,000 Setup 375,000 27,500 37,500 Setup hours Spot welds Assembly 585,000 130,000 260,000 390,000 Finishing Machine hours 340,000 20.000 80,000 100,000 Total manufacturing overhead costs $1.487.500 - $1.487,500 Total manufacturing overhead costs Units produced 475,500 202,400 Based on what Ford learned at the seminar, he has gathered the following information about customer support activities. Cost Driver Selling Costs Driver Volume Activity Cost Pool Order entry Orders $240,000 40,000 Customer support 165,000 5,000 Support hours Sales calls Sales calls 240,000 2,000 Shipments 7,000 Express shipping Total selling costs 147,000 $792,000 Ford wants to apply his new profitability analysis techniques to Infrared Technologies, a company he believes is representative of Olson's average customer. Information about infrared's account activity is as follows RF30 purchases 10,000 units Ford wants to apply his new profitability analysis techniques to Infrared Technologies, a company he believes is representative of Olson's average customer. Information about Infrared's account activity is as follows 10,000 units 3,000 units 100 RF30 purchases LF45 purchases Orders placed Customer support Sales calls Express shipments 360 hours 24 95 (a) Your Answer Correct Answer Your Answer orrect Answer Your answer is correct Calculate the activity-based product cost for RF30 and LF45. (Round answers to 2 decimal places, eg. 15.25.) RF30 LF45 Total unit cost $ 13.80 35.40 eTextbook and Media Assistance Used Solution Attempts: unlimited (b) ) Voir lernt (b) Your answer is correct Calculate the cost pool rates for Olson's customer service activities. Cost Pool Activity Rate Order entry $ 6 per order Customer support $ 33 per support hour Sales calls $ 120 per sales call Express shipping $ 21 per shipment eTextbook and Media Attempts: unlimited - Question 2 of 5 MELERD. UTRECU (c) X Your answer is incorrect. Calculate the gross profit, customer net profit, and customer profit margin for Infrared Technologies. (Round customer profit margin to 1 decimal places, eg. 15.2% and other answers to decimal places, eg. 125.) Gross profit 90075 Customer net profit Customer profit margin eTextbook and Media Save for Later Attempts: unlimited Submit Step by Step Solution
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