Kramer Office Supplies offers a number of different products to its customers. It currently allocates its ordering and delivery costs to its residential and business customer groups on the basis of order value. However, the company has recently decided to implement activity-based costing starting in 2022 to assign these costs to customers. Key data for 2021 are as follows: Activity Volume Activity Volume Residential $ 3,640,000 $ 3,000,000 5,950 2,380 102 Total Activity Cost Activity Volume $ 6,640,000 7,600 6,200 490 Activity Base Business Sales (order value) Order processing Generating sales Sales follow-up Processing change orders Delivery Activity No. of orders No. of sales calls No. of follow-ups No. of change orders No. of deliveries 2$ 955,000 752,000 816,000 62,000 1,400,992 $ 3,985,992 1,650 3,820 388 196 194 390 5,970 3,630 9,600 Total Kramer has 1,900 residential customers and 490 business customers. Required: 1. Compute the cost per customer for residential and business customers for 2021, using the current system of cost allocation. (Do not round intermediate calculations. Round "Cost per customer" to 2 decimal places and the rest to the nearest whole dollar amount.)

Kramer Office Supplies offers a number of different products to its customers. It currently allocates its ordering and delivery costs to its residential and business customer groups on the basis of order value. However, the company has recently decided to implement activity-based costing starting in 2022 to assign these costs to customers. Key data for 2021 are as follows: Activity Volume Activity Volume Residential $ 3,640,000 $ 3,000,000 5,950 2,380 102 Total Activity Cost Activity Volume $ 6,640,000 7,600 6,200 490 Activity Base Business Sales (order value) Order processing Generating sales Sales follow-up Processing change orders Delivery Activity No. of orders No. of sales calls No. of follow-ups No. of change orders No. of deliveries 2$ 955,000 752,000 816,000 62,000 1,400,992 $ 3,985,992 1,650 3,820 388 196 194 390 5,970 3,630 9,600 Total Kramer has 1,900 residential customers and 490 business customers. Required: 1. Compute the cost per customer for residential and business customers for 2021, using the current system of cost allocation. (Do not round intermediate calculations. Round "Cost per customer" to 2 decimal places and the rest to the nearest whole dollar amount.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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