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Allocating Selling and Administrative Expenses using Activity-Based Costing Shrute Inc. manufactures once copiers, which are sold to retailers. The price and cost of goods sold

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Allocating Selling and Administrative Expenses using Activity-Based Costing Shrute Inc. manufactures once copiers, which are sold to retailers. The price and cost of goods sold for each copier are as follows: Price $760 per unit Cost of goods sold (460) Gross pront $300 per un In addition, the company incurs selling and administrative expenses of $206,650. The company wishes to sign these costs to its three major til customers, The Warehouse, Kosmo Co., and Supply Universe. These expenses are related to its three major nonmanufacturing active customer service, sales order processing, and advertising support. The advertising support is in the form of advertisements that are placed by Shrute Inc. to sopport the retailer's sale of Shrute copiers to consumers. The budgeted activity costs and activity bases associated with these activities are Activity Budgeted Activity Cost Activity Base Customer service $33,390 Number of service requests Sales order processing 29,760 Number of sales orders 223,500 Number of ads placed Advertising support Totat activity cost $286,650 Activity base usage and unit volume information for the three customers is as follows: The Warehouse Kosmo Co. Total Supply Universe 40 10 160 210 Number of service requests Number of sales orders 270 120 570 900 20 110 20 150 Number of ads placed 710 710 710 2130 Unit volume Unit volume 710 210 710 2,130 Required: 1. Determine the activity rates for each of the three nonmanufacturing activities. Round to the nearest whole dollar Activity Rate Customer Service per serv.ro Sales Order Processing per sis. order Advertising Support per ad 2. Determine the activity costs allocated to the three customers, using the activity rates in (1). Activity Costs The Warehouse Kosmo Co. Supply Universe 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs (2) The reports should disclose the gross prorit and operating income associated with each customer 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity contain (2). The reports should disclose the gross profit and operating income associated with each customer. Shrute Inc. Customer Profitability Report For the Year Ended December 31 The Warehouse Kosmo Co. Supply Universe Revenues Cost of goods sold Gross profit Selling and administrative activities: Customer service Sales order processing Advertising support Total selling and administrative activities Operating income

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