Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Nerrod Company sells its products at $520 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 $520 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 | $ | 410 | per visit |
Order processing | $ | 105 | per order |
Deliveries | $ | 55 | per order + $0.50 per mile |
Sales returns | $ | 65 | per return and $3.00 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 | 11 | 2 | ||
Number of parts per order | 510 | 2,010 | ||
Sales returns: | ||||
Number of returns | 4 | 10 | ||
Number of units returned | 40 | 50 | ||
Number of sales calls | 7 | 5 | ||
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 to Expert-Tailored 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