1. Schneider Electric manufactures power distribution equipment for commercial customers, such as hospitals and manufacturers. Activity-based costing was used to determine customer profitability. Customer service activities were assigned to individual customers, using the following assumed customer service activities, A measure of activity that is related to changes in cost. Used in analyzing and classifying cost behavior. Activity bases are also used in the denominator in calculating the predetermined factory overhead rate to assign overhead costs to cost objects.activity base, and The cost of an activity per unit of activity base, determined by dividing the activity cost pool by the activity base.activity rate:

   Customer Service Activity	Activity Base	Activity Rate
   Bid preparation	Number of bid requests	$400 per request
   Shipment	Number of shipments	$ 80 per shipment
   Support standard items	Number of standard items ordered	$ 25 per std. item
   Support nonstandard items	Number of nonstandard items ordered	$150 per nonstd. item

   Assume that the company had the following gross profit information for three representative customers:

   	Customer 1			Customer 2			Customer 3
   Revenues		$120,000			$200,000			$160,000
   Cost of goods sold		76,800			110,000			83,200
   Gross profit		$43,200			$90,000			$76,800
   Gross profit as a percent of sales		36%			45%			48%

   The administrative records indicated that the activity-base usage quantities for each customer were as follows:

   Activity Base	Customer 1	Customer 2	Customer 3
   Number of bid requests	14	38	55
   Number of shipments	30	60	48
   Number of standard items ordered	15	30	50
   Number of nonstandard items ordered	5	70	80

   a. Prepare a customer profitability report dated for the year ended December 31, 20Y8, showing (1) the income from operations after customer service activities, (2) the gross profit as a percent of sales, and (3) the income from operations after customer service activities as a percent of sales. Prepare the report with a column for each customer. Round percentages to the nearest whole percent. Enter all amounts as positive numbers.

   Schneider Electric
   Customer Profitability Report
   For the Year Ended December 31, 20Y8
   	Customer 1	Customer 2	Customer 3
   Revenues	$	$	$
   Cost of goods sold
   Gross profit	$	$	$
   Customer service activities:
   Bid preparation	$	$	$
   Shipment
   Support standard items
   Support nonstandard items
   Total customer service activities	$	$	$
   Income from operations after customer service activities	$	$	$
   Gross profit as a percent of sales	%	%	%
   Income from operations after customer service activities as a percent of sales	%	%	%