Stinler Corporation manufactures curtains for retail stores and for individual customers The retail chain buys 70 of the curtains produced The individual customers purchase curtains in approximately equal quantities, where the orders are about the same size Data concerning Stinler's customer activity are as follows Retail Stores Individual Customers Units sold 56,000 24,000 Orders placed 8 492 Number of sales calls 4 156 Manufacturing costs $8,000,000 $3,500,000 Order filling costs allocated $375,000 $225,000 Sales force costs allocated $265,000 $135,000 Currently customer driven costs are assigned to customers based on units sold, a unit level driver Assign costs to customers using an ABC approach (hint you do not need to assign Manufacturing Costs, that is a cost directly traceable to each customer) What is the cost of Retail Stores (Include a comma but no $, example 10,000) What is the cost allocated to Individual Customers (Include a comma but no $, example 10,000) What is the total amount of Customer Driven Costs that need to be re allocated between Retail and Individual Customers (Include a comma and no $, Example 10,000)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 18, 2024

Stinler Corporation manufactures curtains for retail stores and for individual customers. The retail chain buys 70% of the curtains produced. The individual customers purchase curtains

Stinler Corporation manufactures curtains for retail stores and for individual customers. The retail chain buys 70% of the curtains produced. The individual customers purchase curtains in approximately equal quantities, where the orders are about the same size. Data concerning Stinler's customer activity are as follows:

	Retail Stores	Individual Customers
Units sold	56,000	24,000
Orders placed	8	492
Number of sales calls	4	156
Manufacturing costs	$8,000,000	$3,500,000
Order filling costs allocated	$375,000	$225,000
Sales force costs allocated	$265,000	$135,000

Currently customer-driven costs are assigned to customers based on units sold, a unit-level driver.

Assign costs to customers using an ABC approach (hint you do not need to assign Manufacturing Costs, that is a cost directly traceable to each customer):

What is the cost of Retail Stores? (Include a comma but no $, example: 10,000)

What is the cost allocated to Individual Customers? (Include a comma but no $, example: 10,000)

What is the total amount of Customer Driven Costs that need to be re-allocated between Retail and Individual Customers? (Include a comma and no $, Example: 10,000)