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Smith Company sells its products at $820 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the
Smith Company sells its products at $820 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the following operating costs: Cost Driver and Rate Activity Sales calls $560 Order processing $ 180 Deliveries $75 Sales returns $90 per visit per order per order +$0.50 per mile per return and $3 restocking per unit returned Smith Company has gathered the following data pertaining to activities it performed for two of its customers: XBT NINTO Number of orders 26 2 Number of parts per order 660 2,160 Sales returns: Number of returns 4. 10 Number of units returned (per return) 72 50 Number of sales calls 13 9 Miles per delivery 10 20 Shipping terms FOB, Factory FOB, Destination What is Smith's total customer unit-level cost applicable to XBT as a customer? O $4,360. $6,684. $864. O $4,509. $75.
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