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Activity$-$Based Customer Costing

Sleepeze Company produces mattresses for $20$ retail outlets. Of the $20$ retail outlets, $19$ are small, separately owned furniture stores and one is a retail chain. The retail chain buys $60\%$ of the mattresses produced. The $19$ smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepeze's customer activity are as follows:

Large Retailer Smaller Retailers

Units purchased $108,00072,000$

Orders placed $363,600$

Number of sales calls $18882$

Manufacturing costs $$43,200,000$ $$28,800,000$

Order filling costs allocated$*$ $$1,455,127$ $$970,085$

Sales force costs allocated$*$ $$719,820$ $$479,880$

$*$Currently allocated on sales volume $($units sold$).$

Currently, customer$-$driven costs are assigned to customers based on units sold, a unit$-$level driver.