Alocating 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: $680 per unit Cost of goods sold Gross profit In addition, the company incurs selling and administrative expenses of $317.160. The company wishes to as these costs to its three major retal customers, The Warehouse, Kosmo Co, and Supply Universe. These expenses are related to its three major no manufacturing 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 retaler's sale of Shrute copiers to consumers. The budgeted activity costs and activity bases associated with these actwins are: Activity Customer service Budgeted Activity Cost Activity Base $17.940 Number of service requests 22,620 Number of esorders 246,600 Nm Number of ads placed Sales order processing Advertising support Total activity cost $317.160 Activity base usage and unit volume information for the three customers is as follows: The Warehouse Kosmo Co. Tumber of service requests Number of sales orders **220 Number of ads placed U volime 710 Reed: 1. Determine the activity rates for each of the three nonmanufacturing activities. Round to the nearest whole dollar Activity Rate Customer Service $ 141 per serv. reg. Sales Order Processing $ 29 per bid Advertising Support $ 1,370 per customer design change 2. Determine the activity costs allocated to the three customers, using the activity rates in (1) Activity Costs The Warehouse Kosmo Co Supply Universe Check My World 1. Calculate for each activity Total cost. Total activity base = Activity Rate 2. Calculate for each product: Activity usage x Activity rate from Reg (1) - Activity cost; Sum al activity costs per product to determine a total and divide the total overhead by budoeted units to drive the activity costs per unit for each product. Leaming Objective 5. 3. Construct customer profitability reports for the three customers, dated for the year ended December 31, 2016, using the activity costsin (2). The reports should disclose the gross profit and income from operations associated with each customer Enteral amounts as positive numbers, except for a negative come from operations. Shrute Inc. Customer Profitability Report For the Year Ended December 31 The Warehouse Kos Succy Univers Bus Cost of goods sold Se d e active sport nilu |OODI Tout and a b ove acties C o w Cost of this per