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Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail
Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepeze's customer activity are as follows: Smaller Retailers Large Retailer 108,000 36 72,000 3,600 882 Units purchased Orders placed Number of sales calls Manufacturing costs Order filling costs allocated Sales force costs allocated $43,200,000 $1,527,120 $756,000 $28,800,000 $1,018,080 $504,000 *Currently altocated on sales volume (units sold). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Required: Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar Order filling rate 24.012 X per order per sales call Selling call rate Cost assignment 0.475 x Large retailer Smaller retailers 52.125 X
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