Activity Costs Customer Profitability Report 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports should disclose the gross profit and income from operations associated with each customer. Refer to the lists of Labels and Amount Descriptions for 2. Determine the activity costs allocated to the three customers, using the activity rates in the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Colons (:) will automatically appear if required. (1). Refer to the lists of Labels and Amount Descriptions for the exact wording of the Enter all amounts as positive numbers, except for a negative income from operations. answer choices for text entries. Arctic Air Inc. Activity Costs Customer Profitability Report (Label) 3 Gough Industries Breen Inc. The Martin Group 2 3 5 (Label) Activity rates 1. Determine the activity rates for each of the three nonmanufacturing activity pools. Refer to the wording of the answer choices for text entries. 10 1 Activity $Activity rates.00 2 per serv. req. per bid per design change
Activity Costs Customer Profitability Report 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports should disclose the gross profit and income from operations associated with each customer. Refer to the lists of Labels and Amount Descriptions for 2. Determine the activity costs allocated to the three customers, using the activity rates in the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Colons (:) will automatically appear if required. (1). Refer to the lists of Labels and Amount Descriptions for the exact wording of the Enter all amounts as positive numbers, except for a negative income from operations. answer choices for text entries. Arctic Air Inc. Activity Costs Customer Profitability Report (Label) 3 Gough Industries Breen Inc. The Martin Group 2 3 5 (Label) Activity rates 1. Determine the activity rates for each of the three nonmanufacturing activity pools. Refer to the wording of the answer choices for text entries. 10 1 Activity $Activity rates.00 2 per serv. req. per bid per design change
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Arctic Air Inc. manufactures cooling units for commercial buildings.
Activity-base usage and unit volume information for the three customers is as follows:
|
Gough Industries
|
Breen Inc.
|
The Martin
|
|
Group
|
Total
|
|||
Number of service requests | 65 | 47 | 202 | 314 |
Number of bids | 34 | 20 | 45 | 99 |
Number of customer design changes | 41 | 27 | 156 | 224 |
Unit volume | 21 | 15 | 6 | 42 |
![Activity Costs
Customer Profitability Report
3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports
should disclose the gross profit and income from operations associated with each customer. Refer to the lists of Labels and Amount Descriptions for
2. Determine the activity costs allocated to the three customers, using the activity rates in
the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Colons (:) will automatically appear if required.
(1). Refer to the lists of Labels and Amount Descriptions for the exact wording of the
Enter all amounts as positive numbers, except for a negative income from operations.
answer choices for text entries.
Arctic Air Inc.
1
Activity Costs
Customer Profitability Report
2
(Label)
3
Gough Industries
Breen Inc.
The Martin Group
4
2
3
4
5 (Label)
6
Activity rates
1. Determine the activity rates for each of the three nonmanufacturing activity pools. Refer to the
8
wording of the answer choices for text entries.
9
10
1 Activity
$Activity rates.00
2
per serv. req.
3
per bid
per design change
4](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4075dd7b-7cf0-4080-a9ab-c20ff4793850%2Ff667fb16-84f9-4dc8-819d-8644b06d5a73%2Fouomjhc_processed.png&w=3840&q=75)
Transcribed Image Text:Activity Costs
Customer Profitability Report
3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports
should disclose the gross profit and income from operations associated with each customer. Refer to the lists of Labels and Amount Descriptions for
2. Determine the activity costs allocated to the three customers, using the activity rates in
the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Colons (:) will automatically appear if required.
(1). Refer to the lists of Labels and Amount Descriptions for the exact wording of the
Enter all amounts as positive numbers, except for a negative income from operations.
answer choices for text entries.
Arctic Air Inc.
1
Activity Costs
Customer Profitability Report
2
(Label)
3
Gough Industries
Breen Inc.
The Martin Group
4
2
3
4
5 (Label)
6
Activity rates
1. Determine the activity rates for each of the three nonmanufacturing activity pools. Refer to the
8
wording of the answer choices for text entries.
9
10
1 Activity
$Activity rates.00
2
per serv. req.
3
per bid
per design change
4
![Arctic Air Inc. manufactures cooling units for commercial buildings. The price and cost of goods sold for each unit are as follows:
1 Price per unit
$75,650.00
per unit
2 Cost of goods sold
59,000.00
3 Gross profit per unit
$16,650.00
per unit
In addition, the company incurs selling and administrative expenses of $231,140. The company wishes to assign these costs to its three major customers, Gough Industries, Breen Inc., and The Martin Group. These expenses are related to three
major nonmanufacturing activities: customer service, project bidding, and engineering support. The engineering support is in the form of engineering changes that are placed by the customer to change the design of a product. The budgeted activity
costs and activity bases associated with these activities are:
Budgeted Activity
Activity
Activity Base
1
Cost
2 Customer service
$83,838.00
Number of service requests
3 Project bidding
60,390.00
Number of bids
4 Engineering support
86,912.00
Number of customer design changes
Total costs
$231,140.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4075dd7b-7cf0-4080-a9ab-c20ff4793850%2Ff667fb16-84f9-4dc8-819d-8644b06d5a73%2Fxbq9uv_processed.png&w=3840&q=75)
Transcribed Image Text:Arctic Air Inc. manufactures cooling units for commercial buildings. The price and cost of goods sold for each unit are as follows:
1 Price per unit
$75,650.00
per unit
2 Cost of goods sold
59,000.00
3 Gross profit per unit
$16,650.00
per unit
In addition, the company incurs selling and administrative expenses of $231,140. The company wishes to assign these costs to its three major customers, Gough Industries, Breen Inc., and The Martin Group. These expenses are related to three
major nonmanufacturing activities: customer service, project bidding, and engineering support. The engineering support is in the form of engineering changes that are placed by the customer to change the design of a product. The budgeted activity
costs and activity bases associated with these activities are:
Budgeted Activity
Activity
Activity Base
1
Cost
2 Customer service
$83,838.00
Number of service requests
3 Project bidding
60,390.00
Number of bids
4 Engineering support
86,912.00
Number of customer design changes
Total costs
$231,140.00
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