What is customer specific contribution for Cust B

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Reference no: EM133031880

Problem - Bosa Industries collects information on two customers for the past year: Cust A and Cust B.

 

Cust A

Cust B

Revenues

$1,490,000

$650,000

Cost of goods sold

$1,168,000

$486,000

Number of in-stock orders

14

4

Number of out-of- stock orders

12

24

Bosa estimates the following activity-based cost rate:

Cost of processing and delivering an in-stock order $900

Cost of processing and delivering an out-of- stock order $3,200

An in-stock order is an order for which all the items included are in inventory at the time the order is received.

Required - What is customer specific contribution (customer level operating income) for Cust B?

a. $269,000

b. $83,600

c. $84,100

d. $271,000

Reference no: EM133031880

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