nerrod Company sells its products at $840 per unit, net 30. The firm's gross margin ratio...
nerrod Company sells its products at $840 per unit, net 30. The firm's gross margin ratio is 40 percent. The firm has estimated the following operating costs:
| Activity | Cost Driver and Rate | ||
| Sales calls | $ | 570 | per visit |
| Order processing | $ | 185 | per order |
| Deliveries | $ | 80 | per order + $0.50 per mile |
| Sales returns | $ | 95 | per return and $3.0 restocking per unit returned |
Nerrod Company has gathered the following data pertaining to activities it performed for two of its customers:
| XBT | NINTO | |||
| Number of orders | 27 | 2 | ||
| Number of parts per order | 670 | 2,170 | ||
| Sales returns: | ||||
| Number of returns | 4 | 10 | ||
| Number of units returned | 40 | 50 | ||
| Number of sales calls | 14 | 10 | ||
| Miles per delivery | 10 | 20 | ||
| Shipping terms | FOB, Factory | FOB, Destination | ||
What is Nerrod's total customer-sustaining cost applicable to Ninto?
Multiple Choice
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$570.
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$770.
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$5,700.
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$8,000.
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$8,120.
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nerrod Company sells its products at $840 per unit, net 30. The
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