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Activity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: JIT Distributors Non-JIT Distributors Sales orders 1,200 120 70 Sales calls Service calls 350 Average order size 650 175 6,500 $125 Manufacturing cost/unit $125 Customer costs: Processing sales orders $3,080,000 Selling goods 1,120,000 Servicing goods 1,050,000 Total $5,250,000 Required: 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150. Round calculations to the nearest dollar. JIT Non-JIT Sales (in units) Sales Allocation 2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments. Round the interim calculations to the nearest dollar. Non-JIT Ordering costs Selling costs Service costs Total For non IT distributors by how much can the price be decreased without affecting customer profitability? Round your answer to the nearest cent. per unit Activity-Based Supplier Costing Bowman Company manufactures cooling systems. Bowman produces all the parts necessary for its product except for one electronic component, which is purchased from two local suppliers: Manzer Inc. and Buckner Company. Both suppliers are reliable and seldom deliver late; however, Manzer sells the component for $89 per unit, while Buckner sells the same component for $86. Bowman purchases 80% of its components from Buckner because of its lower price. The total annual demand is 4,000,000 components. To help assess the cost effect of the two components, the following data were collected for supplier-related activities and suppliers: I. Activity Data Activity Cost Inspecting components (sampling only) $540,000 Reworking products (due to failed component) Warranty work (due to failed component) 8,520,000 10,070,000 II. Supplier Data Manzer Inc. Buckner Company Unit purchase price Units purchased $89 800,000 80 $86 3,200,000 3,920 Sampling hours Rework hours 3605,640 800 15,200 Warranty hours * Sampling inspection for Manzer's product has been reduced because the reject rate is so low. Required: 1. Calculate the cost per component for each supplier, taking into consideration the costs of the supplier-related activities and using the current prices and sales volume. (Note: Round the intermediate calculations to the whole number for the following activity rates: "Reworking products" and "Warranty work". Round the unit cost to two decimal places.) Manzer Inc. $ per unit Buckner Company $ per unit 2a. Suppose that Bowman loses $6,240,000 in sales per year because it develops a poor reputation due to defective units attributable to failed components. Using warranty hours, assign the cost of lost sales to each supplier. Manzer Buckner 2b. By how much would this change the cost of each supplier's component? Round your answers to the nearest cent. Manzer Buckner