Steller Manufacturing has two classes of distributors: JIT distributors and non JIT distributors. The JIT distributor places small, frequent orders and the non JIT distributor tends to place larger, less frequent orders. Both types of distributors purchase the same product. The customer activities and costs for the previous quarter are found below:
|
Activity |
JIT |
Non JIT |
|
|
Sales Orders |
400 |
25 |
425 |
|
Sales Calls |
20 |
20 |
40 |
|
Service Calls |
180 |
80 |
160 |
|
Average order size |
75 |
1200 |
|
|
Manufacturing cost/unit |
$40 |
$40 |
|
|
|
|
|
|
|
Customer Costs |
|
|
|
|
Processing sales orders |
$150,000 |
|
|
|
Selling Goods |
$145,000 |
|
|
|
Servicing goods |
$185,000 |
|
|
|
Total |
$485,000 |
|
|
1) Calculate the activity rate for processing sales orders
a. $330.09 per order
b. $525 per order
c. $275.76 per order
d. $352.94 per order
e. $342.43 per order
2) Calculate the activity rate for selling goods
a. $3625 per sales call
b. $3550 per sales call
c. $2200 per sales call
d. $4800 per sales call
e. $9400 per sales call
3) Calculate the activity rate for servicing goods
a. $1089.00 per service call
b. $750.10 per service call
c. $675.50 per service call
d. $1,000.00 per service call
e. $711.54 per service call
4) Calculate the total customer cost for the JIT distributor
a. $487500
b. $341753
c. $600000
d. $250050
e. $448791
5) Calculate the total customer cost for the non JT distributor
a. $150025
b. $122500
c. $175200
d. $138247
e. $178791