Question

HEY if it is possible may you show your formulas??

Thank youuuu

Arctic Air Inc. manufactures cooling units for commercial buildings. The price and cost of goods sold for each unit are as follows: 1 Price per unit $74,900.00 per unit 2 Cost of goods sold 60,550.00 3 Gross profit per unit $14,350.00 per unit In addition, the company incurs selling and administrative expenses of $233,998. The company wishes to assign these costs to its three major customers, Gough Industries, Breen Inc., and The Martin Group. These expenses are related to three major nonmanufacturing activities: customer service, project bidding, and engineering support. The engineering support is in the form of engineering changes that are placed by the customer to change the design of a product. The budgeted activity costs and activity bases associated with these activities are: Activity Budgeted Activity Cost Activity Base Customer service $91,080.00 Number of service requests 3 Project bidding 58,900.00 Number of bids 4 Engineering support 84,018.00 Number of customer design changes Total costs $233,998.00

Answer 1

Part 1
Calculation of Activity Rate
Activity	Activity Cost(Col 1)	Cost Driver(Col 2)	Activity Rate(Col 1 / Col.2)
Customer Service	$                                91,080	330 Service requests	$                                276.00	Per service requests
Project Bidding	$                                58,900	100 Bids	$                                589.00	Per Bids
Engineering Support	$                                84,018	209 customer design changes	$                                402.00	Per customer design changes
Part 2
Allocation of Activity Costs		Activity Rate * Activity-Base Usage
	Activity Rate	Gough Industries	Breen Inc.	Group	Total
Customer Service	$                                276.00	$                                    17,388	$                                15,456	$                     58,236	$           91,080
Project Bidding	$                                589.00	$                                    20,615	$                                11,191	$                     27,094	$           58,900
Engineering Support	$                                402.00	$                                    16,884	$                                12,462	$                     54,672	$           84,018
Part 3
Customer Profitability Report
For the Year ended December 31
	Gough Industries	Breen Inc.	Group	Total
Revenue(Unit Volume*$74,900)	1797600	1048600	374500	3220700
Cost of goods sold((Unit Volume*$60,550)	1453200	847700	302750	2603650
Gross Profit	344400	200900	71750	617050
Selling & Administraitive activitites:
Customer Service	$                                17,388	$                                    15,456	$                                58,236	$                     91,080
Project Bidding	$                                20,615	$                                    11,191	$                                27,094	$                     58,900
Engineering Support	$                                16,884	$                                    12,462	$                                54,672	$                     84,018
Total Selling & Administraitive activitites	$                                54,887	$                                    39,109	$                             1,40,002	$                  2,33,998
Income from Operations	$                             2,89,513	$                                 1,61,791	$                               -68,252	$                  3,83,052