b

Allocating Selling and Administrative Expenses using Activity Based Costing Shrute Inc, manufactures office copiers, which are sold to retailers. The price and cost of goods sold for each copier are as follows: Price $750 per unit Cost of goods sold (460) Gross profit $300 per unit In addition, the company incurs selling and administrative expenses of 5286,650. The company wishes to assign these costs to its three major retas customers. The Warehouse, Kosmo Co., and Supply Universe. These expenses are related to its three major nomenutacturing activities customer service, sales order processing, and advertising support. The advertising support is in the form of advertisements that are placed by Shrute Inc to support the retailer's sale of Shrute copiers to consumers. The budgeted activity costs and activity bases associated with these activities Activity Budgeted Activity Cost Activity Base Customer service $33,390 Number of service requests Sales order processing 29,760 Number of sales orders Advertising support 223,500 Number of ads placed Total activity cost $286,650 Activity base usage and unit volume information for the three customers is as follows: The Warehouse Kosmo Co. Supply Universe Total 40 10 160 Number of service requests 210 270 120 960 Number of sales orders 20 20 110 150 Number of ads placed 570