Kramer Corporation is an office supplier dealing in a number of different produc
ID: 2603077 • Letter: K
Question
Kramer Corporation is an office supplier dealing in a number of different products. It currently allocates its ordering and delivery costs to its residential and business customer groups on the basis of order value However, the company has recently decided to implement activity-based costing starting in 20X4 to assign these costs to customers. Key data for 20X3 are as follows Activity Volume Business $3,540,000 $2,910,000 $6,450,000 Activity Volume Total Activity Volume Activity Cost Activity Activity Base Residential Sales (order value) Order processing Generating sales Sales follow-up 5,990 2,300 105 198 6,050 7,600 6,400 500 400 1,610 4,100 395 $ 950,000 No. of orders 740,000 813,000 64,000 1,208,185 No. of sales calls No. of follow-ups No. of chan No. of deliveries ge Processing change orders Delivery orderS 4,050 10,100 Total $3,775,185 Kramer has 2,030 residential customers and 510 business customers Required 1. Compute the cost per customer for residentia and business customers for 20X3, using the current system of cost allocation. (Do not round intermediate calculations. Round "Cost per customer" to 2 decimal places and the rest to the nearest whole dollar amount.) Residential Business Ordering and delivery costs applied Number of customers Cost per customerExplanation / Answer
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Residential Business Ordering and delivering cost applied 2071962 1703223 Number of customers 2030 510 Cost per customer 1020.67 3339.65Related Questions
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