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XYZ Repairs PTY Ltd repairs cars and other automobiles for 2 companies. XYZs costs consist of the cost of technicians and equipment that are traceable to the customer site, and a pool of office overhead. Management at XYZ estimate customer profitability by allocating the office overhead to each customer based on share of revenues. The management accountant reported the following results for the financial year ending 2020:

	ABC	EFG	Total
Revenues	$195,000	$150,000	$345,000
Technician and Equipment Cost	$136,500	$131,250	$267,750
Office overhead allocated	$23,894	$18,380	$42,274
Operating Profit	$34,606	$370	$34,976

The management accountant notes that the office overhead is more that 10% of total costs. Accordingly, he spends a few weeks to analyse the consumption of office overhead resources by customers. He collects the following information.

Activity	Cost-driver rate
Service call handling	$42 per service call
Parts ordering	$40 per web-based parts order
Invoicing and collection	$25 per bill

	ABC	EFG
Number of service calls	112	180
Number of web-based parts order	40	157
Number of reminder letters	22	67

Required:

1. Prepare reports on customer-level operating profit and cumulative customer-profitability using the information that the management accountant has gathered

2. Analyse these reports and recommend the options that management at XYZ should consider, with regard to individual customers, in light of the analysis of office overhead

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