7-42 Activity-Based Customer-Driven Costs that Stillwater Designs has two classes of distributo p Erercise 7 OBJEC rs: JIT distributors and nonJIT dis- IIT distributor places small, frequent orders, and the nonJIT distributor tends to less frequent orders. Both types of distributors are buying the same product. Still- rovides the following information about customer-related activities and costs for tnbutors larger the most recent quarter JIT NonJIT Distributors Distributors Sales orders Sales calls Service calls Average order size Manufacturing cost/unit Customer costs: 700 70 350 750 $125 70 70 175 7,500 $125 Processing sales orders Selling goods Servicing goods $3,080,000 1,120,000 1,050,000 $5,250,000 Total Required: L. Calculate the total revenues per distributor category, and assign the customer costs to each 2CONCEPTUAL CONNECTION Calculate the customer cost per distributor type using ac- dstributor type by using revenues as the allocation base. Selling price for one unit is S150. tivity-based cost assignments. Discuss the merits of offering the nonJIT distributors a $2 price decrease (assume that they are agitating for a price concession). CONCEPTUAL CONNECTION Assume that the JIT distributors are simply imposing the frequent order on Stillwater Designs. No formal discussion has taken place between JIT ad Stillwater Designs regarding the supply of goods on a JIT basis. The sales time. As an independent consultant, what would you suggest to pe pattern has evolved over Sillwater Designs' management