When will I go through customs on an international flight? (CVG to FRA to TXL)?

I am taking a large group of travelers from the US to Berlin (flying US Airways). We have a layover in Frankfurt on the way to Berlin. Will we go through customs (including retreiving our bags in Frankfurt)? I hope not as we only have a 1 hour and 10 minute layover. US Airways says that we will, but the travel agent swears that we won't and that our luggage will be checked all the way to Berlin and that we will not clear customs until arriving in Berlin. Seems to be some confusion over what "first point of entry" means. US Airways says it's when you first enter Eurpoe and the travel agent says it's when you first enter Europe and leave the airport for your stay.