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What is nerrod total customer-sustaining cost applicable

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Reference no: EM133068210

Question - Nerrod Company sells its products at $500 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

$400 per visit

Order processing

$100 per order

Deliveries

$50 per order + $0.50 per mile

Sales returns

$60 per return and $3 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

10

2

Number of parts per order

500

2,000

Sales returns:

 

 

Number of returns

4

10

Number of units returned

40

50

Number of sales calls

6

10

Miles per delivery

10

20

Shipping terms

FOB, Factory

FOB, Destination

Required - What is Nerrod's total customer-sustaining cost applicable to Ninto?

Reference no: EM133068210

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