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v Re Douglas College x 1 Announcements / Co x | Cengage Learning X CengageNOWv2 | Or x MindTap - Cengage l X | Course Hero * *Search Results | Cour x | + X G 25 v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=assignments&takeAssignmentSessionLocator=assignment-take&inprogress=false M Gmail YouTube V Maps Translate Week 4 Homework eBook 1. PR.07-39 Activity-Based Costing and Customer-Driven Costs Lambo Auto Limited manufactures a limited edition luxury car that it sells through distributors. The company sells the cars to its distributors for $150,000 each and is very willing to 2. EX.07-26 accommodate the requirements of its distributors in order to increase volume. Even though the car sells for a high price, the small batch production methods result in only modest profits. 3. EX.05-18.Algo In addition to the normal manufacturing and operating costs that result in a margin on each auto sold of about $10,000, the company incurs some additional costs because of its close relationship to its distributors. These include sales and service calls ($3,500 each); engineering changes ($15,000 each); special packaging for overseas shipment ($15,000 each); and order processing costs ($3,500 each). While these costs seem quite high, the company believes that it controls the demands of its distributors to keep the costs low. Below is a chart of the additional costs required by each of its distributors: Sales/Service Changes Packaging Orders Distributor Cars Sold Calls Made Requests Placed Atkins 200 20 Brower 200 40 15 8 Caldwell 200 80 75 15 Driscoll 200 160 125 18 30 Required: Determine the profitability of each customer and recommend action to the company. Operating Income Atkins Brower Caldwell Driscoll Total Feedback Check My Work Next Progress: 1/3 items Assignment Score: 66.67% All work saved. Save and Exit Submit Assignment for Grading

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