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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
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 Nurnber of sales calls 18 982 Manufacturing costs $43,200,000 $28,800,000 Order filling costs allocated $1,581,660 $1,054,440 Sales force costs allocated $729,000 $486,000 *Currently allocated on sales volume (units solc). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Required: Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar. Order filling rate X per order Selling call rate X per sales call Cost assignment: Large retailer X Smaller retailers X
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