Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please do all the requirements Burtman - Toch has only two retail and two wholesale customers. Information relating to each customer for 2020 follows (in

please do all the requirements
image text in transcribed
image text in transcribed
image text in transcribed
Burtman - Toch has only two retail and two wholesale customers. Information relating to each customer for 2020 follows (in thousands): (Cick the icon to view the data.) Burtman - Techis annual distibution-channel costs are $40 millon for wholesale customers and $6 mitlicn for retail customers. The companys annual corporase-sustainirg costs, auch as salacy for top management and general-administration costs, are $69 million. There is no cause-and-effect or benefits-received relationship between any cost-allocation base and corporate-sustaining costr. That is, Burtman - Tech could seve corporato-sustairing costs only if the company completely shuts down. Read the requirements. Requirement 1, Calculase customer-lovel operating income. Begin by calculating each customers gross margin. Then calculate the operating income for each customer. (Enter amounts in thousands.) Burtman - Tech has only two retall and two wholesale customers. Information relating to each customer for 2020 follows (in thousands): (Click the icon to view the data.) Data Tablo Ch's annual distribution-channel costs are $40 million for wholesale customers and $6 million for retail customers. The company's annual corporate-5 That is, Burtm Read the requ Data table urtman - Tech has only two retail and two wholesale customers. Information relating to each customer for 2020 follows (in thousands): (Click the icon to view the data.) turtman - Tech's annual distribution-channel costs are $40 million for wholesale customers and $6 million for retall customers. The company's ann op management and general-administration costs, are $69 million. There is no cause-and-effect or benefits-received relationship between any cost hat is, Bur Read the re Requirements 1. Calculate customer-level operating income. 2. Prepare a customer-cost hierarchy report. 3. Burtman - Tech's management decides to allocate all corporate-sustaining costs to distribution channels: $52 million to the wholesale channel and $17 million to the retail channel. As a result, distribution channel costs are now $92 million ( $40 million +$52 million) for the wholesale channel and $23 million ( $6 million +$17 million) for the retail channel. Calculate the distribution-channel-level operating income. On the basis of these calculations, what actions, if any, should Burtman - Tech's managers take? Explain. 4. How might Burtman - Tech use the new cost information from its activity-based costing system to better manage its business

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Tax Audit Approach And Due Diligence Related To Tax Credits

Authors: Mohamed Ben Sassi

1st Edition

6204246941, 978-6204246949

More Books

Students also viewed these Accounting questions

Question

what is conceptual framework

Answered: 1 week ago

Question

Which form of proof do you find least persuasive? Why?

Answered: 1 week ago