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Kling Inc. has only two retail and two wholesale customers. Information relating to each customer for 2020 follows: (Click the icon to view the customer-level operating income.) (Click the icon to view the data.) Kling's annual distribution-channel costs are $32,000 for wholesale customers and $13,000 for retail customers. The company's annual corporate costs are $45,000. There is no cause-and-effect or benefits-received relations between any cost-allocation base and corporate-sustaining costs. That is, Kling could save corporate-sustaining costs only if the company completely shuts down. Requirement Prepare a customer-cost hierarchy report. First, determine the formula and then enter the amounts to calculate the total customer costs for each customer. (Abbreviations used: W. = West; E. = East; Dist. = Distribution; oper. = operating; inc. = income.) Total customer-level costs W. Region E. Region Stock Inc. + + + = = =

Kling Inc. has only two retail and two wholesale customers. Information relating to each customer for 2020 follows: (Click the icon to view the customer-level operating income.) (Click the icon to view the data.) Kling's annual distribution-channel costs are $32,000 for wholesale customers and $13,000 for retail customers. The company's annual corporate costs are $45,000. There is no cause-and-effect or benefits-received relations between any cost-allocation base and corporate-sustaining costs. That is, Kling could save corporate-sustaining costs only if the company completely shuts down. Requirement Prepare a customer-cost hierarchy report. First, determine the formula and then enter the amounts to calculate the total customer costs for each customer. (Abbreviations used: W. = West; E. = East; Dist. = Distribution; oper. = operating; inc. = income.) Total customer-level costs W. Region E. Region Stock Inc. + + + = = =

FINANCIAL ACCOUNTING
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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Data table Revenues at list prices Discounts from list prices Cost of goods sold Delivery costs Order processing costs Cost of sales visit Wholesale Customers West Region Wholesaler 740,000 $ 51,600 590,000 29,100 12,610 12,400 Print East Region Wholesaler 1,250,000 $ 79,200 1,050,000 23,430 16,930 10,310 Done Retail Customers Stock Inc. 340,000 $ 20,400 301,000 16,550 9,400 9,300 Darby Corp 300,000 6,100 200,000 14,200 7,300 8,100 X Reference Revenues at list price Price discounts Revenues at actual prices Cost of goods sold Gross margin Customer-level operating costs: Delivery Order processing Sales visits Total cust-level oper. costs Customer-level operating income Wholesale West Region Wholesaler $ 740,000 $ 51,600 688,400 590,000 98,400 29,100 12,610 12,400 54,110 44,290 $ East Region Wholesaler 1,250,000 $ 79,200 1,170,800 1,050,000 120,800 23,430 16,930 10,310 50,670 70,130 $ Stock Inc. Retail 340,000 $ 20,400 319,600 301,000 18,600 16,550 9,400 9,300 35,250 (16,650) $ Darby Corp I 300,000 6,100 293,900 200,000 93,900 14,200 7,300 8,100 29,600 64,300 X
Transcribed Image Text:Data table Revenues at list prices Discounts from list prices Cost of goods sold Delivery costs Order processing costs Cost of sales visit Wholesale Customers West Region Wholesaler 740,000 $ 51,600 590,000 29,100 12,610 12,400 Print East Region Wholesaler 1,250,000 $ 79,200 1,050,000 23,430 16,930 10,310 Done Retail Customers Stock Inc. 340,000 $ 20,400 301,000 16,550 9,400 9,300 Darby Corp 300,000 6,100 200,000 14,200 7,300 8,100 X Reference Revenues at list price Price discounts Revenues at actual prices Cost of goods sold Gross margin Customer-level operating costs: Delivery Order processing Sales visits Total cust-level oper. costs Customer-level operating income Wholesale West Region Wholesaler $ 740,000 $ 51,600 688,400 590,000 98,400 29,100 12,610 12,400 54,110 44,290 $ East Region Wholesaler 1,250,000 $ 79,200 1,170,800 1,050,000 120,800 23,430 16,930 10,310 50,670 70,130 $ Stock Inc. Retail 340,000 $ 20,400 319,600 301,000 18,600 16,550 9,400 9,300 35,250 (16,650) $ Darby Corp I 300,000 6,100 293,900 200,000 93,900 14,200 7,300 8,100 29,600 64,300 X
Kling Inc. has only two retail and two wholesale customers. Information relating to each customer for 2020 follows: (Click the icon to view the customer-level operating income.) (Click the icon to view the data.) Kling's annual distribution-channel costs are $32,000 for wholesale customers and $13,000 for retail customers. The company's annual corporate costs are $45,000. There is no cause-and-effect or benefits-received relationship between any cost-allocation base and corporate-sustaining costs. That is, Kling could save corporate-sustaining costs only if the company completely shuts down. Requirement Prepare a customer-cost hierarchy report. First, determine the formula and then enter the amounts to calculate the total customer costs for each customer. (Abbreviations used: W. = West; E. = East; Dist. = Distribution; oper. = operating; inc. = = income.) W. Region E. Region Stock Inc. Darby Corp + + + || || Total customer-level costs
Transcribed Image Text:Kling Inc. has only two retail and two wholesale customers. Information relating to each customer for 2020 follows: (Click the icon to view the customer-level operating income.) (Click the icon to view the data.) Kling's annual distribution-channel costs are $32,000 for wholesale customers and $13,000 for retail customers. The company's annual corporate costs are $45,000. There is no cause-and-effect or benefits-received relationship between any cost-allocation base and corporate-sustaining costs. That is, Kling could save corporate-sustaining costs only if the company completely shuts down. Requirement Prepare a customer-cost hierarchy report. First, determine the formula and then enter the amounts to calculate the total customer costs for each customer. (Abbreviations used: W. = West; E. = East; Dist. = Distribution; oper. = operating; inc. = = income.) W. Region E. Region Stock Inc. Darby Corp + + + || || Total customer-level costs
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W. Region E. Region Stock Inc. Darby Corp $ Cost of goods sold 590,000 1,050,000 301,000 200,000 + Operating income (loss) + $ + $ + Cust-level oper. costs 54,110 50,670 35,250 29,600 Total = Total customer-level costs 644,110 1,100,670 336,250 229,600 = || || GA GA CA Now prepare a customer-cost hierarchy report. (Use parentheses or a minus sign to enter an operating loss. Abbreviations used: W. = West; E. = East; Dist. = Distribution; oper. = operating; inc. = income.) EA Customer Distribution Channels Wholesale Customers Total W. Region E. Region Wholesale Wholesaler Wholesaler Retail Customers Total Retail Stock Inc. Darby Corp
Transcribed Image Text:W. Region E. Region Stock Inc. Darby Corp $ Cost of goods sold 590,000 1,050,000 301,000 200,000 + Operating income (loss) + $ + $ + Cust-level oper. costs 54,110 50,670 35,250 29,600 Total = Total customer-level costs 644,110 1,100,670 336,250 229,600 = || || GA GA CA Now prepare a customer-cost hierarchy report. (Use parentheses or a minus sign to enter an operating loss. Abbreviations used: W. = West; E. = East; Dist. = Distribution; oper. = operating; inc. = income.) EA Customer Distribution Channels Wholesale Customers Total W. Region E. Region Wholesale Wholesaler Wholesaler Retail Customers Total Retail Stock Inc. Darby Corp
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