Workshape Manufacturing 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 purchase the same product. The customer activities and costs for the previous quarter are as follows:ActivityJIT distributorsNon-JIT distributorsSales Orders50030Sales Calls3030Service Calls20090Average Order Size901,400Manufacturing Cost/Unit$50$50Customer Costs:Processing Sales Orders$160,000Selling Goods$155,000Servicing Goods$195,000Total$500,000Calculate the total customer cost for the non-JIT distributors. (Note: Round the activity rates and activity costs to the nearest dollar.) a.$175,200 b.$150,025 c.$147,030 d.$122,500 e.$178,791

Customer costs are the costs related to customers. Customer costs include the cost of sales and…

Answered: Workshape Manufacturing has two classes…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 2CE: Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each...

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Workshape Manufacturing 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 purchase the same product. The customer activities and costs for the previous quarter are as follows:

Activity	JIT distributors	Non-JIT distributors
Sales Orders	500	30
Sales Calls	30	30
Service Calls	200	90
Average Order Size	90	1,400
Manufacturing Cost/Unit	$50	$50


Customer Costs:
Processing Sales Orders	$160,000
Selling Goods	$155,000
Servicing Goods	$195,000
Total	$500,000

Calculate the total customer cost for the non-JIT distributors. (Note: Round the activity rates and activity costs to the nearest dollar.)

	a.	$175,200
	b.	$150,025
	c.	$147,030
	d.	$122,500
	e.	$178,791

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