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I need a solution and the answer to the last question in #2, please. Activity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of
I need a solution and the answer to the last question in #2, please.
Activity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The IT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: JIT Distributors Non-IT Distributors Sales orders Sales calls Service calls Average order size 6,500 Manufacturing cost/unit $125 $125 Customer costs: Processing sales orders $3,430,000 Selling goods 1,120,000 Servicing goods 1,050,000 Total $5,600,000 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150. Round calculations to the nearest dollar. JIT Non-JIT Sales (in units) Sales $ $ $ 585,000 87,750,000 87,750,000 2,800,000 $ $ 585,000 87,750,000 2,800,000 Allocation 2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments. Round the interim calculations to the nearest dollar. JIT Non-JIT 311,850 Ordering costs Selling costs Service costs $ $ $ $ 3,118,500 560,000 700,000 4,378,500 $ $C $ $ 560,000 350,000 1,221,850 Total For non JIT distributors by how much can the price be decreased without affecting customer profitability? Round your answer to the nearest cent. $ 2.10 X per unitStep by Step Solution
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