Crazing Tiles is a small distributor of marble tiles. Crazing identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016: E (Click the icon to view the details.) For 2016, Crazing buys 210,000 marble tiles at an average cost of $3 per tile and sells them to retailers at an average price of $6 per tile. Assume Crazing has no fixed costs and no inventories. Read the requirements. quirements Data Table Quantity of Cost Driver Cost per Unit of Cost Driver alculate Crazing's operating income for 2016. Activity Cost Driver or 2017, retailers are demanding a 4% discount off the 2016 price. Crazing's suppliers are ly willing to give a 3% discount. Crazing expects to sell the same quantity of marble tiles in 017 as in 2016. If all other costs and cost-driver information remain the same, calculate razing's operating income for 2017. 1. Placing and paying for orders of marble tiles Number of orders 500 $70 per order 2. Receiving and storage Loads moved 4,800 $40 per load uppose further that Crazing decides to make changes in its ordering and ceiving-and-storing practices. By placing long-run orders with its key suppliers, Crazing pects to reduce the number of orders to 200 and the cost per order to $35 per order. By designing the layout of the warehouse and reconfiguring the crates in which the marble tiles e moved, Crazing expects to reduce the number of loads moved to 3,925 and the cost per ad moved to $38. Will Crazing achieve its target operating income of $2.23 per tile in 2017? 3. Shipping of marble tiles to retailers Number of shipments 1,600 $50 per shipment Print Done now your calculations
Crazing Tiles is a small distributor of marble tiles. Crazing identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016: E (Click the icon to view the details.) For 2016, Crazing buys 210,000 marble tiles at an average cost of $3 per tile and sells them to retailers at an average price of $6 per tile. Assume Crazing has no fixed costs and no inventories. Read the requirements. quirements Data Table Quantity of Cost Driver Cost per Unit of Cost Driver alculate Crazing's operating income for 2016. Activity Cost Driver or 2017, retailers are demanding a 4% discount off the 2016 price. Crazing's suppliers are ly willing to give a 3% discount. Crazing expects to sell the same quantity of marble tiles in 017 as in 2016. If all other costs and cost-driver information remain the same, calculate razing's operating income for 2017. 1. Placing and paying for orders of marble tiles Number of orders 500 $70 per order 2. Receiving and storage Loads moved 4,800 $40 per load uppose further that Crazing decides to make changes in its ordering and ceiving-and-storing practices. By placing long-run orders with its key suppliers, Crazing pects to reduce the number of orders to 200 and the cost per order to $35 per order. By designing the layout of the warehouse and reconfiguring the crates in which the marble tiles e moved, Crazing expects to reduce the number of loads moved to 3,925 and the cost per ad moved to $38. Will Crazing achieve its target operating income of $2.23 per tile in 2017? 3. Shipping of marble tiles to retailers Number of shipments 1,600 $50 per shipment Print Done now your calculations
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Crazing Tiles is a small distributor of marble tiles. Crazing identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016:
(Click the icon to view the details.)
For 2016, Crazing buys 210,000 marble tiles at an average cost of $3 per tile and sells them to retailers at an average price of $6 per tile. Assume Crazing has no fixed costs and no inventories.
Read the requirements.
equirements
Data Table
Quantity of
Cost Driver
Cost per Unit of
Cost Driver
Calculate Crazing's operating income for 2016.
Activity
Cost Driver
For 2017, retailers are demanding a 4% discount off the 2016 price. Crazing's suppliers are
only willing to give a 3% discount. Crazing expects to sell the same quantity of marble tiles in
2017 as in 2016. If all other costs and cost-driver information remain the same, calculate
Crazing's operating income for 2017.
1. Placing and paying for orders of marble tiles
Number of orders
500 $70 per order
2. Receiving and storage
Loads moved
4,800 $40 per load
Suppose further that Crazing decides to make changes in its ordering and
receiving-and-storing practices. By placing long-run orders with its key suppliers, Crazing
expects to reduce the number of orders to 200 and the cost per order to $35 per order. By
redesigning the layout of the warehouse and reconfiguring the crates in which the marble tiles
are moved, Crazing expects to reduce the number of loads moved to 3,925 and the cost per
oad moved to $38. Will Crazing achieve its target operating income of $2.23 per tile in 2017?
Show your calculations.
3. Shipping of marble tiles to retailers
Number of shipments
1,600 $50 per shipment
Print
Done
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