Activity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT 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. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: Sales orders Sales calls Service calls Average order size Manufacturing cost/unit Customer costs: Processing sales orders Selling goods Servicing goods Total JIT Distributors 900 70 350 750 $125 $3,580,000 1,120,000 1,050,000 $5,750,000 Non-JIT Distributors 90 70 175 7,500 $125
Activity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT 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. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: Sales orders Sales calls Service calls Average order size Manufacturing cost/unit Customer costs: Processing sales orders Selling goods Servicing goods Total JIT Distributors 900 70 350 750 $125 $3,580,000 1,120,000 1,050,000 $5,750,000 Non-JIT Distributors 90 70 175 7,500 $125
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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