1 answer

Workshape Manufacturing has two dasses of distributors: JIT distributors and non-JIT distributors. The IT distributor places...

Question:

Workshape Manufacturing has two dasses of distributors: JIT distributors and non-JIT distributors. The IT distributor places
Workshape Manufacturing has two dasses of distributors: JIT distributors and non-JIT distributors. The IT 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 as follows: Non-IT distributors Activity Sales Orders Sales Calls Service Calls Average Order Size Manufacturing Cost/Unit IT distributors SOO 30 200 90 1,400 $50 III Customer Costs: Processing Sales Orders Selling Goods Servicing Goods Total LIIT $160,000 $155,000 $195,000 $500,000 Calculate the activity rate for processing sales orders. (Note: Round answer to two decimal places.) a $301.89 per sales order b. $330.09 per sales order c. $275.76 per sales order d. $342.43 per sales order e. $525.33 per sales order < Previous Next

Answers

Activity rate for processing sales orders

= overhead cost/Total sales orders

= 160,000/(500+30)

= 160,000/530

= 301.89 per sales order

.

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