Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 5, Problem 65P
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.
Cost-driver data for two of Fresno’s customers for the most recent year are
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:
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 (1) 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 $59,000.
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are as follows:
Month
January
February
March
April
May
June
July
August
September
October
November
December
Total
Average
Hours of
Maintenance
Service
560
480
280
470
350
460
320
430
490
380
350
340
4,910
409
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Maintenance
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$ 5,110
4,240
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3,590
4,000
3,220
3,170
3,070
$ 43,580
$ 3,632
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$
49,192 X
Chapter 5 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
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