Problem
Stinler Corporation manufactures curtains for retail stores and for individual customers. The retail chain buys 70% of the curtains produced. The individual customers purchase curtains in approximately equal quantities, where the orders are about the same size. Data concerning Stinler's customer activity are as follows: Retail Stores Individual Customers Units sold 56,000 24,000 Orders placed 8 492 Number of sales calls 4 156 Manufacturing costs 8,000,000 3,500,000 Order filling costs allocated 375,000 225,000 Sales force costs allocated 265,000 135,000 Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver.
Required:
A. Assign costs to customers by using an ABC approach. Retail Stores Individual Customers Ordering $ $ Sales calls $ $ $ $
B. Determine cost per unit sold for each type of customer.