60.1K

Verified Solution

Link Copied!

Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Kate Incorporated Company Number of orders 4 50 Units per order 3,000 160 Sales returns: Number of returns 2 5 Total units returned 40 120 Number of sales calls 14 3 Colleen sells its products at $280 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs: Activity Cost Driver and Rate Sales calls $600 per visit Order processing 240 per order Deliveries 480 per order Sales returns 270 per return and $6 per unit returned Sales salary 94,000 per month Required: 1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company 2. Compare the profitability of these two customers. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company Jerry Kate Company Incorporated Customer unit level costs: Prav 1 of 1 SH: Naut Required 1 Required 2 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. Jerry, Incorporated Kate Company Customer unit level costs: Customer batch level costs: Customer sustaining costs: Total Hotel Required 2 > Required 1 SEX Required 2 Compare the profitability of these two customers. (Loss amounts should be indicated by a minus sign, Round operating margin (loss) to 2 decimal places (.e. 0.2134 should be entered as 21.34%).) Jerry. Incorporated Kate Company Net sales Operating income (loss) Operating margin (loss) %

Answer & Explanation Solved by verified expert

See Answer