Question
Dormirblen Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a
Dormirblen Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Dormirbien's customer activity are as follows: Large Retailer Smaller Retailers Units purchased Orders placed 36,000 34,000 12 1,050 Number of sales calls 6 294 Manufacturing costs $14,400,000 $9,600,000 Order filling costs allocated $484,800 $323,200 Sales force costs allocated $240,000 $160,000 "Currently allocated on sales volume (units sold). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Required: Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar. Order filling rate Selling call rate per order per sales call Cost assignment:
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