Reference no: EM132516199

Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size.

Data concerning Sleepeze's customer activity are as follows:

                                                                Large Retailer                        Smaller Retailers

Units purchased                                 108,000                             72,000

Orders placed                                       36                                     3,600

Number of sales calls                               18                                       882

Manufacturing costs                              $43,200,000                   $28,800,000

Order filling costs allocated*                    $1,636,200                     $1,090,800

Sales force costs allocated*                        $864,000                        $576,000

*Currently allocated on sales volume (units sold).

Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver.

Required:

Question 1: Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar.