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Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Incorporated 3 3,000 Number of orders Units per order Sales returns: Number of returns Total units returned Number of sales calls Activity Sales calls Order processing Deliveries Sales returns Sales salary Colleen sells its products at $180 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs: Required 1 Required 2 Customer unit level costs: Sales returns Required: 1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. 2. Compare the profitability of these two customers. Customer batch level costs: Order processing Sales returns Delivery Complete this question by entering your answers in the tabs below. Customer sustaining costs: Total 1 68 11 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. Kate Company $700 per visit 210 per order 310 per order 288 per return and $3 per unit returned 92,000 per month S Jerry, Incorporated S S Kate Company 48 180 3 120 6 180 S Cost Driver and Rate 810 990 S 4,800 4.800

Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Incorporated 3 3,000 Number of orders Units per order Sales returns: Number of returns Total units returned Number of sales calls Activity Sales calls Order processing Deliveries Sales returns Sales salary Colleen sells its products at $180 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs: Required 1 Required 2 Customer unit level costs: Sales returns Required: 1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. 2. Compare the profitability of these two customers. Customer batch level costs: Order processing Sales returns Delivery Complete this question by entering your answers in the tabs below. Customer sustaining costs: Total 1 68 11 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. Kate Company $700 per visit 210 per order 310 per order 288 per return and $3 per unit returned 92,000 per month S Jerry, Incorporated S S Kate Company 48 180 3 120 6 180 S Cost Driver and Rate 810 990 S 4,800 4.800

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Incorporated 3 3,000 Number of orders Units per order Sales returns: Number of returns Total units returned Number of sales calls Activity Sales calls Order processing Deliveries Sales returns Sales salary Colleen sells its products at $180 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs: Required 2 Customer unit level costs: Sales returns Required: 1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. 2. Compare the profitability of these two customers. Customer batch level costs: Order processing Sales returns Delivery Complete this question by entering your answers in the tabs below. Customer sustaining costs: Total 1 60 11. Required 1 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. $700 per visit 210 per order 310 per order 200 per return and $3 per unit returned 92,000 per month Jerry, Incorporated $ $ Kate Company 48 180 $ 3 120 Cost Driver and Rate 180 $ 810 990 $ Kate Company 4,800 4,800
Transcribed Image Text:Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers. Jerry, Incorporated 3 3,000 Number of orders Units per order Sales returns: Number of returns Total units returned Number of sales calls Activity Sales calls Order processing Deliveries Sales returns Sales salary Colleen sells its products at $180 per unit. The firm's gross margin ratio is 25%. Both Jerry and Kate pay their accounts promptly and no accounts receivable is over 30 days. After using business analytics software to carefully analyze the operating data for the past 30 months, the firm has determined the following activity costs: Required 2 Customer unit level costs: Sales returns Required: 1. Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. 2. Compare the profitability of these two customers. Customer batch level costs: Order processing Sales returns Delivery Complete this question by entering your answers in the tabs below. Customer sustaining costs: Total 1 60 11. Required 1 Using customers as the cost objects, classify the activity costs into cost categories (unit-level, batch-level, etc.) and compute the total cost for Colleen Company to service Jerry, Incorporated and Kate Company. $700 per visit 210 per order 310 per order 200 per return and $3 per unit returned 92,000 per month Jerry, Incorporated $ $ Kate Company 48 180 $ 3 120 Cost Driver and Rate 180 $ 810 990 $ Kate Company 4,800 4,800
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