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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 3,600 Number of sales calls 882 Manufacturing costs 18 $43,200,000 $1,745,280 $729,000 $28,800,000 $1,163,520 Order filling costs allocated* Sales force costs allocated $486,000 *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: $ $ 800 1,350 per order per sales call Large retailer $ $ 43,235,100 x 32,870,700 x Smaller retailers
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