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-J listributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information abou 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 1,100 70 350 750 $125 $3,230,000 1,120,000 1,050,000 $5,400,000 Non-JIT Distributors 110 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-J listributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information abou 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 1,100 70 350 750 $125 $3,230,000 1,120,000 1,050,000 $5,400,000 Non-JIT Distributors 110 70 175 7,500 $125
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
![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.
Sales (in units)
Sales
Allocation
Ordering costs
Selling costs
Service costs
$
Total
JIT
2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments. Round the interim calculations to the nearest dollar.
Non-JIT
JIT
Non-JIT
For non JIT distributors by how much can the price be decreased without affecting customer profitability? Round your answer to the nearest cent.
per unit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecb3ccf8-64a3-4f42-90b5-c9c7edf16923%2Ffd0bbbb1-0786-4983-b957-dec395623abb%2Fa6a4nb_processed.png&w=3840&q=75)
Transcribed Image Text: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.
Sales (in units)
Sales
Allocation
Ordering costs
Selling costs
Service costs
$
Total
JIT
2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments. Round the interim calculations to the nearest dollar.
Non-JIT
JIT
Non-JIT
For non JIT distributors by how much can the price be decreased without affecting customer profitability? Round your answer to the nearest cent.
per unit
![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
Required:
JIT
Distributors
1,100
70
350
750
$125
$3,230,000
1,120,000
1,050,000
$5,400,000
Non-JIT
Distributors
110
70
175
7,500
$125](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecb3ccf8-64a3-4f42-90b5-c9c7edf16923%2Ffd0bbbb1-0786-4983-b957-dec395623abb%2Fxleks0f_processed.png&w=3840&q=75)
Transcribed Image Text: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
Required:
JIT
Distributors
1,100
70
350
750
$125
$3,230,000
1,120,000
1,050,000
$5,400,000
Non-JIT
Distributors
110
70
175
7,500
$125
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education