- Assume that the company produced 1,000 unfinished rails and 500 chrome rails during a month. It had no beginning or ending inventory for the month. - Operation costing tracks direct materials by job and tracks conversion costs (direct labor and overhead) by department. Example - Assume that the company produced 1,000 unfinished rails and 500 chrome rails during a month. It had no beginning or ending inventory for the month. - Operation costing tracks direct materials by job and tracks conversion costs (direct labor and overhead) by department. Assigning marketing, distribution, and selling expenses to customers Titan Company's cost system assigns marketing, distribution, and selling expenses to customers using a rate of 30% of sales revenue. The new controller has discovered that Titan's customers differ greatly in their ordering patterns and interaction with Titan's sales force. Because the controller believes Titan's cost system does not accurately assign marketing, distribution, and selling expenses to customers, she developed an activity-based costing system to assign these expenses to customers. She then identified the following marketing, distribution, and selling costs for two customers, Gordon and Sylvester: The following additional information is available: Required (a) Using the current cost system's approach of assigning marketing, distribution, and selling expenses to customers using a rate of 30% of sales revenue, determine the operating profit associated with Gordon and with Sylvester. (b) Using the activity-based costing information provided, determine the operating profit associated with Gordon and with Sylvester. (c) Which of the two methods produces more accurate assignment of marketing, distribution, and selling expenses to customers? Explain