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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: Units purchased Orders placed Number of sales calls Manufacturing costs Order filling costs allocated Sales force costs allocated* Large Retailer 108,000 36 18 $43,200,000 $1,472,580 $756,000 Smaller Retailers 72,000 3,600 882 $28,800,000 $981,720 $504,000 Currently allocated on sales volume (units sold) 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 Selling call rate Cost assignment: Large retailer Smaller retailers 0.11X per order per sales call Feedback
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