Smith Company sells its products at $620 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the following operating cost Activity Sales calls Order processing Deliveries Sales returns $460 per visit $130 per order $80 per order + $0.50 per mile $90 per return and $3 restocking per unit returned Smith Company has gathered the following data pertaining to activities it performed for two of its customers: Cost Driver and Rate Number of orders Number of parts per order Sales returns: Number of returns Number of units returned (per return) Number of sales calls Miles per delivery Shipping terms What is Smith's total customer batch-level cost applicable to Ninto? XBT 16 560 4 40 12 10 FOB, Factory NINTO 2 2,060 10 50 10 20 FOB, Destination
Smith Company sells its products at $620 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the following operating cost Activity Sales calls Order processing Deliveries Sales returns $460 per visit $130 per order $80 per order + $0.50 per mile $90 per return and $3 restocking per unit returned Smith Company has gathered the following data pertaining to activities it performed for two of its customers: Cost Driver and Rate Number of orders Number of parts per order Sales returns: Number of returns Number of units returned (per return) Number of sales calls Miles per delivery Shipping terms What is Smith's total customer batch-level cost applicable to Ninto? XBT 16 560 4 40 12 10 FOB, Factory NINTO 2 2,060 10 50 10 20 FOB, Destination
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Smith Company sells its products at $620 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the following operating costs:
Activity
Sales calls
Order processing
Deliveries
Sales returns
Cost Driver and Rate
$460 per visit
$ 130 per order
$80 per order + $0.50 per mile
$ 90 per return and $3 restocking per unit returned
Smith Company has gathered the following data pertaining to activities it performed for two of its customers:
Number of orders
Number of parts per order
Sales returns:
Number of returns.
Number of units returned (per return)
Number of sales calls
Miles per delivery
Shipping terms
What is Smith's total customer batch-level cost applicable to Ninto?
XBT
16
560
4
40
12
10
FOB, Factory
NINTO
2
2,060
10
50
10
20
FOB, Destination
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