Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Number of orders Units per order Sales returns: Number of returns Total units returned Jerry, Incorporated 5 Kate Company 60 2,000 220 3 30 13 5 190 6 Number of sales calls Colleen sells its products at $290 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 Sales calls Deliveries Cost Driver and Rate $1,000 per visit 200 per order 440 per order Order processing 290 per return and $6 per unit returned 99,000 per month Sales returns Sales salary 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. correct

Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Number of orders Units per order Sales returns: Number of returns Total units returned Jerry, Incorporated 5 Kate Company 60 2,000 220 3 30 13 5 190 6 Number of sales calls Colleen sells its products at $290 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 Sales calls Deliveries Cost Driver and Rate $1,000 per visit 200 per order 440 per order Order processing 290 per return and $6 per unit returned 99,000 per month Sales returns Sales salary 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. correct

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Dexter, Incorporated, had a cost of goods sold of $43,921. At the end of the year, the accounts payable balance was $7,943. How long on average did it take the company to pay off its suppliers during the year? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Days' sales in payables 66.00 days
Question Hare, Inc., had a cost of goods sold of $43,921. At the end of the year, the accounts payable balance was $7,943. How long on average did it take the company to pay off its suppliers during the year? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
Bob's Product Company takes 20 days to convert its raw materials to finished goods, 15 days to sell it, and 25 days to collect its credit sales. What is the company’s days receivable period? Group of answer choices 60 35 25 10 15 A bank letter of credit, sometimes called a standby letter of credit, is a written promise by a bank that it will make a payment on behalf of the customer. This is different than a line of credit, which is a akin to a credit card….a line of credit allows the company to borrow funds as needed to pay any bills. A LETTER of credit is specific to the party that the company might owe money to. Group of answer choices True False
Griswold's, Incorporated (GI), began operations in January, selling inexpensive sunglasses to large retailers like Walgreens and other smaller stores. Assume the following transactions occurred during its first six months of operations. January 1 Sold merchandise to Walgreens for $29,000; the cost of these goods to GI was $20,100. February 12 Received payment in full from Walgreens. March 1 Sold merchandise to Bravis Pharmaco on account for $3,900; the cost of these goods to GI was $1,850. April 1 Sold merchandise to Tony's Pharmacy on account for $8,900. The cost to GI was $4,850. May 1 Sold merchandise to Anjuli Stores on account for $2,900; the cost to GI was $1,650. June 17 Received $6,950 on account from Tony's Pharmacy. Required: 1. Complete the following aged listing of customer accounts at June 30. 2. Estimate the Allowance for Doubtful Accounts required at June 30 assuming the following uncollectible rates: one month, 1 percent; two months, 5 percent; three months, 20 percent;…
Vinubhai
Splish Brothers Inc. sells office equipment and supplies to many organizations in the city and surrounding area on contract terms of 2/10, n/30. In the past, over 75% of the credit customers have taken advantage of the discount by paying within 10 days of the invoice date. The number of customers taking the full 30 days to pay has increased within the last year. Current indications are that less than 60% of the customers are now taking the discount. Bad debts as a percentage of gross credit sales have risen from the 2.5% average in past years to about 4.7% in the current year. The company's Finance Committee has requested more information on the collections of accounts receivable. The controller responded to this request with the following report. Proportion of Total 60% 22% (b1) 9% 5% 214% 13% Age Categories not yet due less than 30 days past due 30 to 60 days past due 61 to 120 days past due 121 to 180 days past due over 180 days past due Probability of Collection 98% 96% Additional…
Keiasia Coates Company sold merchandise for $2,000. The cost of the merchandise was $1,500. Five days later, the customer returns 20% of the merchandise, which is defective, and is not restored to Keasia Company’s merchandise inventory. On day 10, the customer sends a check for the amount due. Assuming the net method, indicate how these transactions combined would affect the following five financial statement items: assets, liabilities, owners equity, revenue, and expenses? Answer: assets:increase, Liabilities: decrease, owners equity:increase, revenue:increase, expenses: increase why and how would liabilites be decreased in this scenario? explain process to answer of this problem
uring the month of April, Orison Supply Store sold $39,000 of inventory, with $25,000 sold on credit and the remaining for cash. The business collected $15,000 from the previous month's credit sales that excluded a bad debt of $750. The inventory sold was purchased at a cost of $2,3400. What was the total revenue recognised in the month of September? (Ignore GST for this question)A. None of the other answers B. 54,000 C. 14,250 D. 38,250 E. 39,000
Dexter, Incorporated, had a cost of goods sold of $67, 882. At the end of the year, the accounts payable balance was $11,989. How long, on average, did it take the company to pay off its suppliers during the year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Del Spencer is the owner and founder of Del Spencer’s Men’s Clothing Store. Del Spencer’s hasits own house charge accounts and has found from past experience that 10 percent of its salesare for cash. The remaining 90 percent are on credit. An aging schedule for accounts receivablereveals the following pattern:15 percent of credit sales are paid in the month of sale.65 percent of credit sales are paid in the first month following the sale.14 percent of credit sales are paid in the second month following the sale.6 percent of credit sales are never collected.Credit sales that have not been paid until the second month following the sale are consideredoverdue and are subject to a 3 percent late charge.Del Spencer’s has developed the following sales forecast:May $60,000June 55,000July 45,000August 56,000September 83,000 Required:Prepare a schedule of cash receipts for August and September.
Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Number of orders Units per order Sales returns: Number of returns Total units returned Number of sales calls Jerry, Incorporated Kate Company 6 30 1,000 420 4 5 50 13 140 5 Colleen sells its products at $290 per unit. The firm's gross margin ratio is 20%. 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 Sales calls Cost Driver and Rate $800 per visit Order processing Deliveries Sales returns Sales salary Required: 180 per order 410 per order 270 per return and $3 per unit returned 107,000 per month 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…