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An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
1.
Customer Project Engineering
Service Bidding Support
Activity cost
Activity base
serv. reqs. bids desgn. chngs.
Activity rate
/serv. req. /bid /change
2.
Number Activity
of Activities Rate = Total
Good Knowledge University
Customer service serv. reqs. /req.
Project bidding bids /bid
Engineering support desgn. chngs. /chng.
Total nonmanufacturing activity costs
Hot Shotz Arena
Customer service serv. reqs. /req.
Project bidding bids /bid
Engineering support desgn. chngs. /chng.
Total nonmanufacturing activity costs
Break-a-Leg Hospital
Customer service serv. reqs. /req.
Project bidding bids /bid
Engineering support desgn. chngs. /chng.
Total nonmanufacturing activity costs
3.
Good Hot Break-
Knowledge Shotz a-Leg
University Arena Hospital
Revenues
Less cost of goods sold
Gross profit
Less selling and administrative activities:
Customer service
Project bidding
Engineering support
Total selling and admin. activities
Income from operations
4.
Key Code:
Instructions
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[Key essay answer here]
COLD ZONE MECHANICAL INC.
Customer Profitability Report
For the Year Ended December 31, 2015
0%
[Key code here]
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Problem 26(11)-5A
Name:
Section:
Score:
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
1.
Customer Project
Engineering
Service Bidding Support
Activity cost
$85,800 $63,640 $91,500
2.
Number Activity
of Activities Rate = Total
Good Knowledge University
Customer service 50 serv. reqs. $325 /req. 16,250$
3.
Good Hot Break-
Knowledge Shotz a-Leg
University Arena Hospital
Revenues 1,206,500$ 762,000$ 317,500$
4.
Break-a-Leg Hospital is unprofitable, while the other two customers have acceptable margins. This is because Break-a-Leg Hospital requires
many customer service, project bidding, and design change activities. For example, Break-a-Leg Hospital awards contracts on only 12.5% of
the bid efforts (5 contracts/40 bids); it requests a large amount of service; and it requires extensive design change effort. The company's
options include:
COLD ZONE MECHANICAL INC.
Customer Profitability Report
For the Year Ended December 31, 2015
Cells with non-gray backgrounds are protected and cannot be edited.
Score:
Instructions
Answers are entered in the cells with gray backgrounds.
ON
Problem 26(11)-5A
Name:
Solution
Section:
