Question

Problem 5-65 Customer-Profitability Analysis; Activity-Based Costing Fresno Fiber Optics, Inc. manufactures fiber optic cables for the computer and telecommunications industries. At the request of the company vice president 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 vists $1,000 Order taking Purchase orders 200 Special handling Units handled Special shipping Shipments 500 50 Cost-driver data for two of Fresno's customers for the most recent year are Customer Related Activities Sales activity Order taking Special handing Special shipping Trace Telecom 8 visits 15 orders. 800 units handled 18 shipments. Caltex Computer 6 VISS 20 orders 600 unts handled 20 shipments The following additional information has been compiled for Fresno Fiber Optics for two of its cus- tomers, Trace Telecom and Caltex Computer, for the most recent year: Sales revenue Cost of goods sold. General saling costs. General administrative costs Trace Telecom $190,000 80,000 24,000 19,000 Caltex Computer $123,800 62,000 18.000 16,000 Required: 1. Prepare a customer profitability analysis for Trace Telecom and Caltex Computer. (Hint: Reér 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 sales revenue was $185.000 and Caltex Computer's cost of goods sold was $59.000.

Need help by 6pm today.