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Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry Incorporated 5 2,000 Kate Company 60
Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry Incorporated 5 2,000 Kate Company 60 220 Number of orders Units per order Sales returns: Number of returns Total units returned Number of sales calls 3 30 13 5 190 6 Colleen sells its products at $290 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs: Activity Sales calls Order processing Deliveries Sales returns Sales salary Cost Driver and Rate $1,000 per visit 200 per order 440 per order 290 per return and $6 per unit returned 99,000 per month Required: 1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. 2. Compare the profitability of these two customers. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. Jerry, Required: 1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. 2. Compare the profitability of these two customers. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. Jerry, Incorporated Kate Company Customer unit level costs: Customer batch level costs: Customer sustaining costs: Total $ 0 $ 0
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