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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 Jerry, Incorporated 5 1,000 Kate Company 30 200 202 40 12 175 4 51 5 Total units returned Number of sales calls Colleen sells its products at $200 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 300 per order 500 per order Order processing 100 per return and $5 per unit returned 100,000 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. 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 (nit-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 $ 0 Required 1 0 Required 2 >

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 Jerry, Incorporated 5 1,000 Kate Company 30 200 202 40 12 175 4 51 5 Total units returned Number of sales calls Colleen sells its products at $200 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 300 per order 500 per order Order processing 100 per return and $5 per unit returned 100,000 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. 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 (nit-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 $ 0 Required 1 0 Required 2 >

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 1P
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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 Jerry, Incorporated 5 1,000 Kate Company 30 200 202 40 12 175 4 51 5 Total units returned Number of sales calls Colleen sells its products at $200 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 300 per order 500 per order Order processing 100 per return and $5 per unit returned 100,000 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. 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 (nit-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 $ 0 Required 1 0 Required 2 >
Transcribed Image Text: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 Jerry, Incorporated 5 1,000 Kate Company 30 200 202 40 12 175 4 51 5 Total units returned Number of sales calls Colleen sells its products at $200 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 300 per order 500 per order Order processing 100 per return and $5 per unit returned 100,000 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. 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 (nit-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 $ 0 Required 1 0 Required 2 >
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