Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Incorporated Kate Company Number of orders 5 30 Units per order 1,000 200 Sales returns: Number of returns 2 5 Total units returned 40 Number of sales calls 12 175 4 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 Order processing Deliveries Sales returns Sales salary Required: Cost Driver and Rate $1,000 per visit 300 per order 500 per order 100 per return and $5 per unit returned 100,000 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 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 Customer unit level costs: Customer batch level costs: Customer sustaining costs: Total Jerry, Incorporated Kate Company $ 0 0 Required 2 >
Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Incorporated Kate Company Number of orders 5 30 Units per order 1,000 200 Sales returns: Number of returns 2 5 Total units returned 40 Number of sales calls 12 175 4 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 Order processing Deliveries Sales returns Sales salary Required: Cost Driver and Rate $1,000 per visit 300 per order 500 per order 100 per return and $5 per unit returned 100,000 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 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 Customer unit level costs: Customer batch level costs: Customer sustaining costs: Total Jerry, Incorporated Kate Company $ 0 0 Required 2 >
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no
Transcribed Image Text:Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers.
Jerry,
Incorporated
Kate
Company
Number of orders
5
30
Units per order
1,000
200
Sales returns:
Number of returns
2
5
Total units returned
40
Number of sales calls
12
175
4
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
Order processing
Deliveries
Sales returns
Sales salary
Required:
Cost Driver and Rate
$1,000 per visit
300 per order
500 per order
100 per return and $5 per unit returned
100,000 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 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
Customer unit level costs:
Customer batch level costs:
Customer sustaining costs:
Total
Jerry,
Incorporated
Kate
Company
$
0
0
Required 2 >
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