Steller 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 activities and costs for
the previous quarter are found below:
Activity
JIT
Non-JIT
Sales Orders
400
25
425
Sales Calls
20
20
40
Service Calls
180
80
160
Average order size
75
1200
Manufacturing cost/unit
$40
$40
Customer Costs
Processing sales orders
$150000
Selling Goods
$145000
Servicing goods
$185000
Total
$485000
1) Calculate the activity rate for processing sales orders
a. $330.09 per order
b. $525 per order
c. $275.76 per order
d. $352.94 per order
e. $342.43 per order
2) Calculate the activity rate for selling goods
a. $3625 per sales call
b. $3550 per sales call
c. $2200 per sales call
d. $4800 per sales call
e. $9400 per sales call
3) Calculate the activity rate for servicing goods
a. $1089.00 per service call
b. $750.10 per service call
c. $675.50 per service call
d. $1000.00 per service call
e. $711.54 per service call
4) Calculate the total customer cost for the JIT distributor
a. $487500
b. $341753
c. $600000
d. $250050
e. $448791
5) Calculate the total customer cost for the non-JT distributor
a. $150025
b. $122500
c. $175200
d. $138247
e. $178791