Required: A. Perform a customer profitability analysis for Tennair. Compute the gross margin and operating income on transactions related to Evans Equipment and Rogers Refrigeration. Gross margin Operating income Evans Equipment Rogers Refrigeration B. Compute gross margin as a percentage of sales revenue. Then compute (1) general selling and administrative costs as a percenta of gross margin and (2) total customer-related costs (.e., costs that arise from sales visits, order taking, and special handling and shipping) as a percentage of gross margin. Note: Round your answers to 2 decimal places. Gross margin General selling and administrative costs Customer-related costs Evans % % Rogers
Required: A. Perform a customer profitability analysis for Tennair. Compute the gross margin and operating income on transactions related to Evans Equipment and Rogers Refrigeration. Gross margin Operating income Evans Equipment Rogers Refrigeration B. Compute gross margin as a percentage of sales revenue. Then compute (1) general selling and administrative costs as a percenta of gross margin and (2) total customer-related costs (.e., costs that arise from sales visits, order taking, and special handling and shipping) as a percentage of gross margin. Note: Round your answers to 2 decimal places. Gross margin General selling and administrative costs Customer-related costs Evans % % Rogers
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
![Tennair Corporation manufactures cooling system components. The company has gathered the following information about two of its
customers Evans Equipment and Rogers Refrigeration.
Evans
Equipment
Sales revenue
Rogers
Refrigeration
$ 160,000
61,000
Cost of goods sold
General selling costs
$ 229,000
102,000
37,000
23,800
28,500
General administrative costs
17,850
Cost-driver data used by the firm and traceable to Evans and Rogers are:
Customer Activity
Sales activity
Order taking
Special handling
Special shipping
Customer Activity
Sales activity
Order taking
Special handling
Special shipping
Cost Driver
Sales visits
Sales orders
Units handled
Shipments
Evans Equipment
12 visits
31 orders
460 units.
33 shipments
Pool Rate
$ 970
278
44
460
Rogers Refrigeration
9 visits
36 orders
410 units
44 shipments
Required:
A. Perform a customer profitability analysis for Tennair. Compute the gross margin and operating income on transactions related to
Evans Equipment and Rogers Refrigeration.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F84fefd46-9e74-4d61-9ac5-d103349d245d%2F1b3478b1-a140-465e-b712-4fc65c52b9ab%2Fw0vnzas_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Tennair Corporation manufactures cooling system components. The company has gathered the following information about two of its
customers Evans Equipment and Rogers Refrigeration.
Evans
Equipment
Sales revenue
Rogers
Refrigeration
$ 160,000
61,000
Cost of goods sold
General selling costs
$ 229,000
102,000
37,000
23,800
28,500
General administrative costs
17,850
Cost-driver data used by the firm and traceable to Evans and Rogers are:
Customer Activity
Sales activity
Order taking
Special handling
Special shipping
Customer Activity
Sales activity
Order taking
Special handling
Special shipping
Cost Driver
Sales visits
Sales orders
Units handled
Shipments
Evans Equipment
12 visits
31 orders
460 units.
33 shipments
Pool Rate
$ 970
278
44
460
Rogers Refrigeration
9 visits
36 orders
410 units
44 shipments
Required:
A. Perform a customer profitability analysis for Tennair. Compute the gross margin and operating income on transactions related to
Evans Equipment and Rogers Refrigeration.
![Required:
A. Perform a customer profitability analysis for Tennair. Compute the gross margin and operating income on transactions related to
Evans Equipment and Rogers Refrigeration.
Gross margin
Operating income
Evans
Equipment
Rogers
Refrigeration
B. Compute gross margin as a percentage of sales revenue. Then compute (1) general selling and administrative costs as a percentage
of gross margin and (2) total customer-related costs (.e., costs that arise from sales visits, order taking, and special handling and
shipping) as a percentage of gross margin.
Note: Round your answers to 2 decimal places.
Gross margin
General selling and administrative costs
Customer-related costs
Evans
%
%
%
Rogers](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F84fefd46-9e74-4d61-9ac5-d103349d245d%2F1b3478b1-a140-465e-b712-4fc65c52b9ab%2Fqtvg18_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required:
A. Perform a customer profitability analysis for Tennair. Compute the gross margin and operating income on transactions related to
Evans Equipment and Rogers Refrigeration.
Gross margin
Operating income
Evans
Equipment
Rogers
Refrigeration
B. Compute gross margin as a percentage of sales revenue. Then compute (1) general selling and administrative costs as a percentage
of gross margin and (2) total customer-related costs (.e., costs that arise from sales visits, order taking, and special handling and
shipping) as a percentage of gross margin.
Note: Round your answers to 2 decimal places.
Gross margin
General selling and administrative costs
Customer-related costs
Evans
%
%
%
Rogers
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