Question: Activity-Based Customer-Driven Costs Suppose that stillwater Designs has two classes of distributors: JIT distributors and non-IT distributors. The IT distributor places small, frequent orders, and

Activity-Based Customer-Driven Costs Suppose that stillwater Designs has two classes of distributors: JIT distributors and non-IT distributors. The IT 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: Non-JIT JIT Distributors Distributors Sales orders 900 90 70 70 350 175 Sales calls Service calls Average order size Manufacturing cost/unit 650 6,500 $125 $125 Customer costs: $3,250,000 Processing sales orders Selling goods 1,120,000 Servicing goods 1,050,000 Total 55,450,000 Required: 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. Round calculations to the nearest dollar JIT Non-JIT Sales (in units 585,000 585,000 Sales 87,750,000 87,750,000 Allocation 2,725,000 2,725,000 2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments. Round the interim calculations to the nearest dollar. JIT Non-JIT Ordering costs 2,981,700 298,170 Selling costs si 560,000 560,000 700,000 Service costs 350,000 Total For non JIT distributors by how much can the price be decreased without affecting customer profitability? Round your answer to the nearest cent. per unit 3. Assume that the IT distributors are simply imposing the frequent orders on Stillwater Designs. No formal discussion has taken
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