MediFitBod manufactures personalised fitness devices that measure fitness output and body health and composition data. It...

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MediFitBod manufactures personalised fitness devices that measure fitness output and body health and composition data. It is currently used by both medical services and the fitness industry. Currently MediFitBod have two main customers and several smaller customers. The management accountant feels that it is important to determine the customer profitability for each of their main customers, FitPro and Medifix, as this information will help determine both the profitability of each customer and may also lead to identifying potential ways to reduce costs. The following data forms the basis for the customer profitability analysis: Customer-driven activities Sales activity Order taking Special handling Special shipping Sales activity Order taking Cost driver Sales visits Cost driver data for the two major customers for 2020 are: Customer-driven activities Special handling Special shipping Purchase orders Units handled Shipments FitPro 8 sales visits 15 purchase orders 800 units handled 15 shipments The following data relates to those two customers: FitPro Sales revenue $500,000 Cost of goods sold $200,000 General selling costs $48,000 General administrative costs $38,000 Cost driver rates $1,200 $400 $100 $1,500 Medifix 6 sales visits 20 purchase orders 600 units handled 40 shipments Medifix $300,000 $120,000 $36,000 $32,000 Required: a) In the table below prepare a customer profitability analysis for FitPro and Medifix. MediFitBod manufactures personalised fitness devices that measure fitness output and body health and composition data. It is currently used by both medical services and the fitness industry. Currently MediFitBod have two main customers and several smaller customers. The management accountant feels that it is important to determine the customer profitability for each of their main customers, FitPro and Medifix, as this information will help determine both the profitability of each customer and may also lead to identifying potential ways to reduce costs. The following data forms the basis for the customer profitability analysis: Customer-driven activities Sales activity Order taking Special handling Special shipping Sales activity Order taking Cost driver Sales visits Cost driver data for the two major customers for 2020 are: Customer-driven activities Special handling Special shipping Purchase orders Units handled Shipments FitPro 8 sales visits 15 purchase orders 800 units handled 15 shipments The following data relates to those two customers: FitPro Sales revenue $500,000 Cost of goods sold $200,000 General selling costs $48,000 General administrative costs $38,000 Cost driver rates $1,200 $400 $100 $1,500 Medifix 6 sales visits 20 purchase orders 600 units handled 40 shipments Medifix $300,000 $120,000 $36,000 $32,000 Required: a) In the table below prepare a customer profitability analysis for FitPro and Medifix.

Answer rating: 100% (QA)

Medifix using tables for better readability Customer FitPro Activities Cost Driver Cost Driver Rate ... View the full answer