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t External Linkages, Customer Costing, Customer Profitability those who place smal, requent orders and those who place larger, les trequent orders. tach time an order i placed and procensed, Scheduling is also needed to coordinate the many different orders that come in and place demands on the plant's inspects a sample of the products each time a batch is produced to ensure that the customers specifications have been met. I y sells small machine parts to heavy equipment manufacturers for an average price of 11.40 per part. There are two types of customers manufacturing resources. Emery als type of part being produced. Emery's Cost Accounting Department has provided the following budgeted data for customer nspection takes essentially the related activities and costs (the amounts expected for the coming year): Frequently Ordering Less Frequently Ordering Customers Customers Sales orders Average order size Number of setups Scheduling hours Inspections Average unit cost This cost does not include the cost of the following customer-related" activites: Customer-related activity costs Processing sales orders Scheduling production Setting up equipment Inspecting batches 31,000 3,100 36,250 46,750 36,250 $0.76 3,100 31,000 5,250 5,250 5,250 0.76 3,069,000 1,404,000 4,482,000 5,976,000 Inspecting batches 5,976,000 Total Required: 1. Assign the customer-related activity costs to each category of customers in proportion to the sales revenue earned by each customer type. Sales revenue Customer-related activity costs Calculate the profitability of each customer type. (Because sales revenues for each customer type are equal, the profitability will be the same for each customer type.) $14,931,000 2. Assign the customer-related activity costs to each customer type using activity rates. Enter the appropriate activity rates below. Processing sales orders Scheduling production Setting up equipment Inspecting batches Calculate the profitability of each customer category. per order per scheduling hour per setup per inspection Customer Profitability Frequent Required to each category of customers in proportion to the sales revenue earned by each customer type. Sales revenue Customer-related activity costs Calculate the profitability of each customer type. (Because sales revenues for each customer type are equal, the profitability wll be th customer type.) 2. Assign the custome Processing sales orders Scheduling production Setting up equipment Inspecting batches Calculate the profitability of each customer category er-related activity costs to each customer type using activity rates. Enter the appropriate activity rates below. per order per scheduling hour per setup per inspection Customer Profitability Frequent Infrequent