PT ABC manufactures cabinets. At the request of PT ABC's VP of marketing, the cost management staff has recently completed a customer-profitability study. The following activity-based costing information was the basis for the analysis:

Customer Related Activities	Cost Driver Base	Cost Driver Rate ($)
Sales activity	sales visits	3,000
Order taking	purchase orders	750
Special handling	units handled	250
Special shipping	shipments	1,500

Cost driver data for two of PT ABC biggest customers for the year 2020 are:

Customer Related Activities	Customer X	Customer Y
Sales activity	30	20	sales visits
Order taking	40	40	purchase orders
Special handling	400	500	units handled
Special shipping	25	20	shipments

The following additional information has been compiled for PT ABC for two of its biggest

customers, Customer X and Customer Y, for the year 2020:

	Customer X	Customer Y
Quantity Sold	400	500
Sales Price	1,400	1,400
Sales Revenue	560,000	700,000
Cost of Goods Sold	140,000	175,000
General Selling Costs	154,000	98,000
General Administrative Costs	70,000	65,000

Required:

1. Calculate customer related costs for each of PT ABC's biggest customers

2. Calculate customer level operating income

3. Comment on the result from Q1 & Q2, which is less/not profitable and why

4. What recommendation would you like to give to PT ABC related to the result of you analysis from Q1-Q3

5. Assume that the price of 1,400 has already considered a generic discount of 200 from list price for PT ABC to be able to compete with market prices. If PT ABC decides on a 15% net profit from the gross revenue, calculate target income and target cost. Provide a comment on your calculation

6. When analyzing the high number of sales visits to Customer X, the company's controller found out that the Sales Rep for Customer X is actually receiving some personal favor from Customer X that resulted in him giving more discount to Customer Y. The Marketing Manager was aware of this but did not report it to his superior.

a. Analyse this situation from the point of view of the code of ethics

b. Provide recommendation for this matter, for the company and for the related staffs involve