80.2K

Verified Solution

Link Copied!

eBook Activity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of distributors: HIT distributors and non-JIT diutributors. The IT distributor places small, frequent orders, and the non-JIT distributor tends to place larger less frequent orders. Both types of distributors are buying the same product, sellwater Designs provides the following information about customer-related activities and conta for the most recent quarter JIT Non-IT Distributors Distributors Sales orders 700 70 Sales calls 70 70 Service calls 350 175 550 5,500 Average order size $125 Manufacturing cost/unit 5125 Customer costs $3,130,000 Processing sales orders Selling goods 1.120.000 Servicing goods 1,050,000 55,300,000 Total M M > Other favorites eBook TO SPOO Required: 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150. Round calculations to the nearest dollar JIT Non-IT Sales (in units) Sales Allocation Conceptual Connection: Calculate the customer cost per distributor type using activity-based cont assignments, Round the interim calculations to the nearest dollar JIT Non-JIT Ordering costs Selling costs Service costs Total For non IT distributors by how much con the price be decreased without affecting customer profitability? Round your answer to the nearest cent per unit

Answer & Explanation Solved by verified expert

See Answer