Activity-Based Customer-Driven Costs Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-IT 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: JIT Distributors Non-JIT Distributors Sales orders Sales calls Service calls Average order size 175 6,500 $125 Manufacturing cost/unit 5125 Customer costs: Processing sales orders $3,280,000 Selling goods 1,120,000 1,050,000 Servicing goods Total $5,450,000 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) 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. JIT Non-JIT Ordering costs A Selling costs A Service costs A Total A 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 JIT distributors are simply imposing the frequent orders of ns. No formal discussion has taken place between JIT customers and Stillwater Designs regarding the supply of goods on a JIT price increases basis. The sales pattern has evolved over time. As an independent consultant suggest to Stillwater Designs' management? price decreases It sounds like the JIT buyers are switching their inventory carrying costs to S ithout any significant benefit to Stillwater Designs. Stillwater Designs needs to prices to reflect the additional demands on customer support activities. Furthermore, additional may be needed to reflect the increased number of setups, purchases, and so on, that are likely occurring inside the plant. Stillwater Designs should also immediately initiate discussions with its JIT customers to begin negotiations for achieving some of the benefits that a JIT supplier should have, such as contracts. The benefits of contracting may offset most or all of the increased costs from the additional demands made on other activities. Cycle Time and Velocity In the first quarter of operations, a manufacturing cell produced 120,000 stereo speakers, using 17,000 production hours. In the second quarter, the cycle time was 10 minutes per unit with the same number of production hours as were used in the first quarter. Required: 1. Compute the velocity (per hour) for the first quarter. If required, round your answer to two decimal places. units per hour 2. Compute the cycle time for the first quarter (minutes per unit produced). If required, round your answer to two decimal places. minutes per unit 3. How many units were produced in the second quarter? units