Activity-Based Customer-Driven Costs Suppose that Stillwater Designs 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 are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter:
1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150.
2. Conceptual Connection: Calculate the customer cost per distributor type using activity-based cost assignments. Discuss the merits of offering the non-JIT distributors a $3 price decrease (assume that they are agitating for a price concession).
3. Conceptual Connection: Assume that the JIT distributors are simply imposing the frequent orders on Stillwater Designs. No formal discussion has taken place between JIT customers and Stillwater Designs regarding the supply of goods on a JIT basis. The sales pattern has evolved over time. As an independent consultant, what would you suggest to Stillwater Designs’ management?
Mark land Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs f...Jun 15 2020
Given: IH = $7,000 IS = $1,000 p = 10% r = $600 If the insurance company is earning zero profits what is the value of q? What can we say about this policy? (full, fair, ...May 08 2020
On July 1, 2016, Empire Inc. lends $13,800 to a customer andreceives a 12% note due in two years. Interest is due in full onJuly 1, 2018, the due date of the note. What i...Mar 22 2020
The national debt refers to the difference between revenues and expenditures in any given year.32. A deficit refers to the accu...Feb 11 2020
Dearborn Supplies has total sales of $202 million, assets of $96 million, a return on equity of 30 percent, and a net profit margin of 7.7 percent. What is the firm’s debt ratio?Nov 27 2019
Allocations of overhead should not affect a project's incremental cash flows unless the: A. project actually increased overhead expenses. B. overhead cannot be rec...Jan 09 2020
L.L.Bean’s first product was a waterproof boot, designed by Maine outdoorsman Leon Leonwood Bean, who promised complete customer satisfaction. One hundred pairs were sold...Jun 03 2020
I need to show (with a time line, for example) that the perpetuity in 4.3a. is exactly the same as the sum of the annuities and perpetuities in 4.3b. to 4.3d.Aug 20 2020
ASD Ltd is considering the purchase of a new machine. Two options have been suggested, each costing $400,000. Earnings after taxation but before depreciation are expected...May 29 2020
The number of molecules crossing a unit area per unit time in one direction is given bywhere n is the number of molecules per unit volume and v is the average molecular v...Mar 29 2020