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Please solve all requirements in the box. Thank you in advance! Orsack - Tech has only two retail and two wholesale customers. Information relating to
Please solve all requirements in the box. Thank you in advance!
Orsack - Tech has only two retail and two wholesale customers. Information relating to each customer for 2017 follows (in thousands (Click the icon to view the data.) Orsack - Tech's annual distribution-channel costs are $38 million for wholesale customers and $9 million for relail customers. The company's annual corporale-suslaining costs, such as salary for top management and general-administration costs, are $87 million. There is no cause-and-effect or benefits-received relationship between any cost-allocation base and corporate-sustaining costs. That is, Orsack-Tech could save corporate-sustaining costs only if the company completely shuts down. Read the roguirements. Requirement 1. Calculate customer-level operating income. Begin by calculating each customer's gross margin. Then calculate the operating income for each customer. (Enter amounts in thousands.) 0 Requirements All amounts in thousands of U.S. Dollars Wholesale Retail North America South America Green Wholesaler Wholesaler Energy Global Power 1. Calculate customer-level operating income. 2. Prepare a customer-cost hierarchy report 3. Orsack - Tech's management decides to allocate all corporale-sustaining costs la distribution channels: $52 million to the wholesale channel and $15 million to the retail channel. As a result, distribution channel costs are now $90 million ($38 million + S52 milion) for the wholesale channel and S24 million (S9 million + $15 million for the retail channel Calculate the distribution-channo Havel operating income. On the basis of these calculations, what actions, if any, should Orsack-Tech's managers take? Explain. 4. How might Orsack - Tech use the new cost information from its activity-based costing system to better manage its business? Gross margin Print Done 0 Data Table Retail Customers Green Global Power Energy Revenues at list prices Discounts from list prices Cost of goods sold Delivery costs Order processing costs Cost of sales visit Wholesale Customers North America South America Wholesaler Wholesaler 430,000 $ 550,000 $ 40,000 37,000 315.000 450,000 500 1,010 5,900 5,800 155,000 $ 7,300 124.000 170 215 2500 105,000 460 98,000 135 650 850 120 1,550Step by Step Solution
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