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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

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 5PA: Allocating selling and administrative expenses using activity-based costing Arctic Air Inc....
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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
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
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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