Biology Forums - Study Force

Jung Manufacturing Ltd. manufactures small engine parts. Data for two of the company's customers is as follows:
     Customer 1   Customer 2
Revenues at list price    $620,000   $94,000
Units sold   80,000   10,000
Unit list price     $7.75   $9.40
Cost of goods per unit    $4.90   $5.17
Sales discounts     93,000   4,700
Customer-specific costs
Order-taking    $12,400   $470
Product-handling     $14,000   $1,500
Delivery     $9,200   $1,250

Required:
a.   Prepare a comparative income statement in gross margin format with one column for each customer; present customer-specific costs as period expenses.
b.   Which customer is relatively more profitable? Support your answer with comparative percentage analysis.

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