Workshape 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-related activities and costs for the previous quarter are as follows: Activity JIT distributors Non-JIT distributors Sales Orders 500 30 Sales Calls 30 30 Service Calls 200 90 Average Order Size 90 1,400 Manufacturing Cost/Unit $50 $50 Customer Costs: Processing Sales Orders $160,000 Selling Goods $155,000 Servicing Goods $195,000 Total $500,000 Calculate the total customer cost for the non-JIT distributors. (Note: Round the activity rates and activity costs to the nearest dollar.)

Question

Jenny Arias

Business

26 October, 17:54

Workshape 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-related activities and costs for the previous quarter are as follows: Activity JIT distributors Non-JIT distributors Sales Orders 500 30 Sales Calls 30 30 Service Calls 200 90 Average Order Size 90 1,400 Manufacturing Cost/Unit $50 $50 Customer Costs: Processing Sales Orders $160,000 Selling Goods $155,000 Servicing Goods $195,000 Total $500,000 Calculate the total customer cost for the non-JIT distributors. (Note: Round the activity rates and activity costs to the nearest dollar.)

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Kassidy Levine · Answer 1

Activity rates:

Processing Sales Orders = 160000 / (500+30) = 302

Selling Goods = 155000 / (30+30) = 2583

Servicing Goods = 195000 / (200+90) = 672

Non-JIT distributors:

Processing Sales Orders = 30*302 = 9060

Selling Goods = 30*2583 = 77,490

Servicing Goods = 90*672 = 60,480

Total customer cost = 9060+77490+60480 = 147,030