Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Nerrod Company sells its products at $500 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the following
Nerrod Company sells its products at $500 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the following operating costs:
| Activity | Cost Driver and Rate | ||
| Sales calls | $ | 400 | per visit |
| Order processing | $ | 100 | per order |
| Deliveries | $ | 50 | per order + $0.50 per mile |
| Sales returns | $ | 60 | per return and $3 restocking per unit returned |
Nerrod Company has gathered the following data pertaining to activities it performed for two of its customers:
| XBT | NINTO | |||
| Number of orders | 10 | 2 | ||
| Number of parts per order | 500 | 2,000 | ||
| Sales returns: | ||||
| Number of returns | 4 | 10 | ||
| Number of units returned | 40 | 50 | ||
| Number of sales calls | 6 | 10 | ||
| Miles per delivery | 10 | 20 | ||
| Shipping terms | FOB, Factory | FOB, Destination | ||
What is Nerrod's total customer batch-level cost applicable to Ninto?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started