Show Me How Calculator Customer Service Activity Bid preparation Shipment Suppor
ID: 2522280 • Letter: S
Question
Show Me How Calculator Customer Service Activity Bid preparation Shipment Support standard items 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 Activity Base Activity Rate Number of bid requests Number of shipments Number of standard items ordered $400 per request $ 80 per shipment $ 25 per std. item Customer Customer Customer $120,000 $200,000 $160,000 83,200 $43,200$90,000 $76,800 76,800 110,000 Cost of goods sold Gross profit Gross profit as a percent of sales 36% 45% follows: The administrative records indicated that the activity-base usage quantities for each customer were as Activity Base Number of bid requests Number of shipments Number of standard items ordered Customer 1 Customer 2 Customer 3 38 60 30 14 30 15 48 50 Check My Work All work saved 8Explanation / Answer
CUSTOMER PROFITABBILITY REPORT CUSTOMER-1 CUSTOMER-2 CUSTOMER-3 Revenues 120000 200000 160000 Cost of goods sold 76800 110000 83200 Gross profit 43200 90000 76800 Customer Service Activities: Bid preparation @400 per request 5600 15200 22000 Shipment @ 80 per shipment 2400 4800 3840 Support Std items @ 25 per itme 375 750 1250 Support non std itme @ 150 per item 750 10500 12000 Total Customer Service activity cost 9125 31250 39090 Net income from operations 34075 58750 37710 Gross Profit % of sales 36% 45% 48% Net Income as % of sales 28.40% 29.38% 23.57%