that designs and manufactures electronic control systems for commercial airlines. The vase majority of all commercial aircraft are manufactured by Boeing in the U.S. and Airbus in Europe; however, there is a relatively small group of companies that manufacture narrow body commercial jets. Assume for this exercise that Roger?s does contract work for the two major manufacturers plus three companies in the second tier. Because competition is intense in the industry, Roger?s has always operated on a fairly thin 20% gross profit margin; hence, it is crucial that it manage non-manufacturing overhead costs effectively in order to achieve and acceptable net profit margin. With declining profit margins in recent years, Roger?s Aeronautics? CEO, Len Rogers, has become concerned that the costs of obtaining contracts and maintain relations with its five major customers may be getting out of hand. You have been hired to conduct a customer profitability analysis. Rogers? Aeronautics? non-manufacturing overhead consist of $2.5 million of general and administrative expense (including, among other expenses, the CEO?s salary and bonus and the cost of operating the company?s corporate jet) and selling and customer support expenses of $3 million (including 5% sales commissions and $1,050,000 of additional costs).The accounting staff determined that the $1,050,000 of additional selling and customer support expenses related to the following four activity cost pools:ActivityCost DriverCost per Unit of Activity1Sales VisitNumber of visits$1,4002Product adjustmentNumber of adjustments$1,2003Phone and email contactsNumber of calls/contacts $2004Promotion and entertainment eventsNumber of events$1,600Financial activity data on the five customers follows (Sales and Gross Profit data in millions):Quantity of Sales and Support ActivityCustomerSalesGross ProfitActivity 1Activity 2Activity 3Activity 41173.410623220822122.4130363546633.652101807444.83461381853.616510410397.833880996250In addition to the above, the sales staff used the corporate jet at a cost of $800 per hour for trips to the customers as follows:Customer 124 hoursCustomer 236 hoursCustomer 35 hoursCustomer 40 hoursCustomer 56 hoursThe total cost of operating the airplane is included in general and administrative expense; none is included in selling and customer support costs.A)Prepare a customer profitability analysis for Roger?s Aeronautics that shows the gross profits less all expenses that can reasonably be assigned to the five customersB)Now assuming that the remaining general administrative costs are assigned to the five customers based on relative sales dollars, calculate net profit for each customer C)Discuss the merits of the analysis in part A versus part B
This question was answered on: Apr 19, 2020Buy this answer for only: $15
This attachment is locked
Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
About this QuestionSTATUS
Apr 19, 2020EXPERT
YES, THIS IS LEGAL
We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.
You can also use these solutions:
- As a reference for in-depth understanding of the subject.
- As a source of ideas / reasoning for your own research (if properly referenced)
- For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
NEW ASSIGNMENT HELP?
Order New Solution. Quick Turnaround
Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.
WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN A DEADLINE.