Fresno Fiber Optics. Inc. manufactures fiber optic cables for the computer and telecommunications

Asked by bizgrad
Dated: 27th Nov'18 08:57 AM
Bounty offered: $10.00

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 visits

$1 ,000

Order taking.

Purchase orders.

200

Special handling.

Units handled

50

Special shipping

Shipments

500

Cost-driver data for two of Fresno's customers for the most recent year are

Customer-Related Activities

Trace Telecom

Caltex Computer

Sales activity

8visits

6visits

Order taking

15orders

20orders

Special handling

800 units handled.

600 units handled

Special shipping

18shipments

20shipments

The following additional information has been compiled for Fresno Fiber Optics for two of its
customers, Trace Telecom and Caltex Computer for the most recent year:

The following additional information has been compiled for Fresno Fiber Optics for two of its
customers, Trace Telecom and Caltex Computer for the most recent year:

Trace Telecom

Caltex Computer

Sales revenue....

$1 90,000.

$123,800.00

Cost of goods sold

80,000

62,000

General selling costs

24,000.

18,000

General administrative costs

19,000

16,000

Required:

1. Prepare a customer profitability analysis for Trace Telecom and Caltex Computer. (Hint: Refer

to Exhibit 5-13 for guidance.),

2. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (I) 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.

Fresno Fiber Optics. Inc. manufactures fiber optic cables for the computer and telecommunications
Answered by bizgrad
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Dated: 27th Nov'18 08:57 AM
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Fresno-Fiber-Optics.xlsx (17.26 KB)
Preview of Fresno-Fiber-Optics.xlsx
sales     $185,000   Caltex Computer’s     goods       2   analysis:Hence, the