Black_BrandiAcc650_T3 completed

Problem 5-65 Fresno Fiber Optics, Inc. manufactures fiber optic cables for the computer and telecommunication industries. At the request of the company 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 1000 Billing and Collection Invoices 200 Order taking Purchase orders 50 Special shipping Shipments 500 Customer - Related Activities Trace Telecom Caltex Computer Sales activity 8 visits 6 visits Billing and Collection 15 invoices 20 invoices Order taking 800 orders 600 orders Special shipping 18 shipments 20 shipments The following additional information has been compiled for Fresno Fiber Optics for two of its customers, Trace Telecom and Caltex Computer, for the most recent year. Trace Telecom Caltex Computer Sales revenue 190000 123800 Cost of goods sold 80000 62000 General selling costs 24000 18000 General administrative costs 19000 16000 Required: 1. Prepare a customer profitability analysis for Trace Telecom and Caltex Computer. (Hint: Refer to Exhibit 5-13 for guidance). 2. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (1) above. Show how the solution will change if the following information changes: Trace Telecom's cost of goods sold was $114,000 and Caltex Computer's sales revenue was $206,000. 1 Customer-related costs: Trace Tele Caltex computer Sales activity 8000 6000 Billing and Collection 3000 4000 Order taking 40000 30000 Special shipping 9000 10000