Schneider Electric manufacturing power distribution equipment for commercial customers, such as hospital and manufactures. 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. 2012, showing(1) The income from operation after customer service activities,(2) The gross profit as a percent of sales(3) The income from operation after customers service activities as a percent of sales. Prepare the report from operations after customer service activities as a percent of sales. Prepare the report with a column for each customer,(b) Interpret the report in part (a).

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Activity Base Customer Service Activity Activity Rate Bid preparation Shipment Support standard items Support nonstandard items Number of bid requests Number of shipments Number of standard items ordered Number of nonstandard items ordered $220/request $18/shipment $24/std. item $82/nonstd. item