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Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor
Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: IT Non-JIT Sales orders Sales calls Service calls Average order size Manufacturing cost/unit Customer costs: Distributors 1,200 70 350 Distributors 120 70 175 7,500 $125 $125 Processing sales orders Selling goods Servicing goods $3,480,000 1,120,00O 1,050,000 5,650,000 Total Required 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using even es as the allocation base. Selling price for one unit is?150 Round calculations to the nearest dollar IT Non-JIT 900,000 Sales (in units) Sales Allocation 2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments. Round the interim calculations to the nearest dollar 900,000V 135,000,000 135,000,000 4,708 X 15,000X IT Non-JIT Ordering costs 23,200 X 753 X
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