Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepeze's customer activity are as follows: Large Retailer Smaller Retailers Units purchased 108,000 72,000 Orders placed 36 3,600 Number of sales calls 18 882 Manufacturing costs $43,200,000 $28,800,000 Order filling costs allocated* $1,455,127 $970,085 Sales force costs allocated* $719,820 $479,880 *Currently allocated on sales volume (units sold). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar. Order filling rate $ per order Selling call rate $ per sales call Cost assignment: Large retailer $ Smaller retailers $
Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepeze's customer activity are as follows: Large Retailer Smaller Retailers Units purchased 108,000 72,000 Orders placed 36 3,600 Number of sales calls 18 882 Manufacturing costs $43,200,000 $28,800,000 Order filling costs allocated* $1,455,127 $970,085 Sales force costs allocated* $719,820 $479,880 *Currently allocated on sales volume (units sold). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar. Order filling rate $ per order Selling call rate $ per sales call Cost assignment: Large retailer $ Smaller retailers $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Activity-Based Customer Costing
Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepeze's customer activity are as follows:
| Large Retailer | Smaller Retailers | |||
| Units purchased | 108,000 | 72,000 | ||
| Orders placed | 36 | 3,600 | ||
| Number of sales calls | 18 | 882 | ||
| $43,200,000 | $28,800,000 | |||
| Order filling costs allocated* | $1,455,127 | $970,085 | ||
| Sales force costs allocated* | $719,820 | $479,880 | ||
| *Currently allocated on sales volume (units sold). |
Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver.
Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar.
| Order filling rate | $ per order |
| Selling call rate | $ per sales call |
| Cost assignment: | |
| Large retailer | $ |
| Smaller retailers | $ |
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