Suppose that Stillwater Designs has two classes of distributors: JIT distributors and nonJIT distributors. The JIT distributor places small, frequent orders, and the nonJIT 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:

1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150.

	JIT		NonJIT
Sales (in units)	___		___
Sales	$__		$ __
Allocation	$ __		$ __

2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments.

	JIT		NonJIT
Ordering costs	$		$
Selling costs	$		$
Service costs	$		$
Total	$		$

Sales orders Sales calls Service calls Average order size Manufacturing cost/unit Customer costs: Processing sales orders Selling goods Servicing goods Total JIT Distributors 700 70 350 750 $125 $3,080,000 1,120,000 1,050,000 $5,250,000 NonJIT Distributors 70 70 175 7,500 $125