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Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepeze s customer activity are as follows: Large Retailer Smaller Retailers Units purchased........................................108,000..........................72,000 Orders placed..................................................36...........................3,600 Number of sales calls.........................................18..............................882 Manufacturing costs..............................$43,200,000...................$28,800,000 Order filling costs allocated*....................$ 1,455,127.......................$ 970,085 Sales force costs allocated*........................$ 719,820......................$ 479,880 *Currently allocated on sales volume (units sold). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Required: Assign costs to customers by using an ABC approach. Round activity rates and activity costs to the nearest dollar.
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