Allocating Selling and Administrative Expenses using Activity Based Costing Shrute Inc manufactures office copiers, which are sold to retailers The price and cost of goods sold for each copier are as follows Price $650 per unit Cost of goods sold 390 Gross profit $260 per unit In addition, the company incurs selling and administrative expenses of $322,200 The company wishes to assign these costs to its three major retail customers, The Warehouse, Kosmo Co , and Supply Universe These expenses are related to its three major nonmanufacturing activities customer service, sales order processing, and advertising support The advertising support is in the form of advertisements that are placed by Shrute Inc to support 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 $43,200 Number of service requests Sales order processing 23,400 Number of sales orders Advertising support 255,600 Number of ads placed Total activity cost $322,200 Activity base usage and unit volume information for the three customers is as follows The Warehouse Kosmo Co Supply Universe Total Number of service requests 70 10 240 320 Number of sales orders 250 110 540 900 Number of ads placed 30 20 130 180 Unit volume 670 670 670 2,010 Required Required 1 Determine the activity rates for each of the three nonmanufacturing activities Round to the nearest whole dollar Activity Rate per serv req Sales Order Processing per bid Advertising Support per customer design change 2 Determine the activity costs allocated to the three customers, using the activity rates in (1) Activity Costs The Warehouse mo Co Supply Universe 3 Construct customer profitability reports for the three customers, dated for the vear ended December 31, 2016, using the activity costs in (2) The report for a negative income from operations Shrute Inc For the Year Ended December 31 The Warehouse Kosmo Co Supply Universe

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

Allocating Selling and Administrative Expenses using Activity-Based Costing

Shrute Inc. manufactures office copiers, which are sold to retailers. The price and cost of goods sold for each copier are as follows:

Price	$650	per unit
Cost of goods sold	390
Gross profit	$260	per unit

In addition, the company incurs selling and administrative expenses of $322,200. The company wishes to assign these costs to its three major retail customers, The Warehouse, Kosmo Co., and Supply Universe. These expenses are related to its three major nonmanufacturing activities: customer service, sales order processing, and advertising support. The advertising support is in the form of advertisements that are placed by Shrute Inc. to support 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			$43,200	Number of service requests
Sales order processing			23,400	Number of sales orders
Advertising support			255,600	Number of ads placed
	Total activity cost		$322,200

Activity-base usage and unit volume information for the three customers is as follows:

	The Warehouse	Kosmo Co.	Supply Universe	Total
Number of service requests	70	10	240	320
Number of sales orders	250	110	540	900
Number of ads placed	30	20	130	180
Unit volume	670	670	670	2,010

Required:

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Required 1. Determine the activity rates for each of the three nonmanufacturing activities. Round to the nearest whole dollar. Activity Rate per serv. req. Sales Order Processing per bid Advertising Support ] per customer design change 2. Determine the activity costs allocated to the three customers, using the activity rates in (1) Activity Costs The Warehouse mo Co Supply Universe 3. Construct customer profitability reports for the three customers, dated for the vear ended December 31, 2016, using the activity costs in (2). The report for a negative income from operations Shrute Inc. For the Year Ended December 31 The Warehouse Kosmo Co.Supply Universe