sporting goods store pride itself son its services to customers sales personal

sporting goods store pride itself son its services to customers sales personal who are paid a commission based on sales dollars spend a lot of time with
customeres helpingthempick the best product the ABC teamdeveloped the following data for the typical month for 600 products

cost drive base activity cost activity voluom

unit level

1-1 sales goods on commision $ sales $23000 $ 230000

Batchlevel

2-1 process purchase nu of purchase order 6000 200

product level

3-1 product advirtising nu of promtion 2000 200

3-2 product inventory nu of product 3000 600

customer level

4-1 acceptance customer return nu of returns 12000 800

facility level

5-1 suppervise sales personal cost of sales personal 3910 $23000 for act 1-1 suppervision cost =17%of activity1-1

5-2 use building Sq Ft of shelf space used 32000 8000

compute total ost and unit cost of 20 tennis rackets and 10 fishing rods for june

1-1 sales goods on commision $ 2000 in sales T reckets $ 1000 in sales F rods

2-1process purchase 2 purchase order 3

3-1 product advirtising 2 promition 2 promotion

3-2 product inventory 1 product 1

4-1 acceptance customer return 6 return 2

5-1 suppervise sales personal see computation of activity 1-1 see computation of activity 1-1

5-2 use building 80 sq ft 60 sq ft

compute the cost drive for each cost driver base

use ABC to compute cost of each product compute both total cost and unit cost for each product the company sold 20 tennis rackets and 10 fishing rods

assume the company traditional system costing assigneed the batch level product customer level and facility level cost at rate of $8.70 per unit sold using
traditional approch to compute the cost of eah product be sure to add unit level of the $8.70 per unit sold compute both total cost and unit cost for each
product

afer computing ABC determined whether unit cost of the two product differ if they are what the cause difference