Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Inc. Kate Co. 5 1,000 Number of orders Units per order Sales returns: Number of returns. Total units returned Number of sales calls Activity Sales calls Order processing Deliveries O Sales returns Sales salary 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: 2 40 12 Required 1 30 200 Required 2 5 175 4 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, Inc. and Kate Co. 2. Compare the profitability of these two customers. Customer unit level costs: Cost Driver and Rate $ 1,000 per visit 300 per order Complete this question by entering your answers in the tabs below. 500 per order 100 per return and $5 per unit returned 100,000 per month 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, Inc. and Kate Co. Jerry Inc. Kate Co.
Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Inc. Kate Co. 5 1,000 Number of orders Units per order Sales returns: Number of returns. Total units returned Number of sales calls Activity Sales calls Order processing Deliveries O Sales returns Sales salary 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: 2 40 12 Required 1 30 200 Required 2 5 175 4 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, Inc. and Kate Co. 2. Compare the profitability of these two customers. Customer unit level costs: Cost Driver and Rate $ 1,000 per visit 300 per order Complete this question by entering your answers in the tabs below. 500 per order 100 per return and $5 per unit returned 100,000 per month 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, Inc. and Kate Co. Jerry Inc. Kate Co.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:Required 1
Required 2
Compare the profitability of these two customers. (Loss amounts should be indicated by a minus sign. Round operating
margin (loss) to 2 decimal places (i.e. .2134 should be entered as 21.34%).).
Jerry Inc.
Kate Co.
Net sales
Operating income (loss)
Operating margin (loss)
%
%
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.
Total units returned.
Number of sales calls
Activity
Sales calls
Order processing
Deliveries
Sales returns
Sales salary
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:
Required 1
Required 2
Jerry, Inc. Kate Co.
5
1,000
Customer unit level costs:
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, Inc. and Kate Co.
2. Compare the profitability of these two customers.
Customer batch level costs:
2
40
12
Complete this question by entering your answers in the tabs below.
Customer sustaining costs:
Total
30
200
5
175
4
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, Inc. and Kate Co.
Jerry Inc.
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
$
Kate Co.
200 $
12,000
875
4,000
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