Question

Schneider Electric manufactures power distribution equipment for commercial customers, such as hospitals and manufacturers. Activity-based costing was used to determine customer profitability. Customer service activities were assigned to individual customers, using the following assumed customer service activities, activity base, and activity rate:


Assume that the company had the following gross profit information for three representative customers:


The administrative records indicated that the activity-base usage quantities for each customer were as follows:


a. Prepare a customer profitability report dated for the year ended December 31, 2014, showing
(1) The income from operations after customer service activities,
(2) The gross profit as a percent of sales,
(3) The income from operations after customer service activities as a percent of sales. Prepare the report with a column for each customer. Round percentages to the nearest whole percent.
b. Interpret the report in part(a).


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  • CreatedJune 27, 2014
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