Demo-case-10 - ABM/ABC cost system: Demonstration Case...

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ABM/ABC cost system: Demonstration Case Windows of the World (WoW) sells and delivers new construction windows to home builders in Mid-Atlantic states. Each window is sold for $130. In addition, WoW charges a flat fee of $5 per window for shipping and handling. Some customers are happy with the arrangement while others are leaving. The owner of WoW, Jack, decides to take a closer look at the situation and hires you as the consultant to do the job. The consultant compiles the data on shipping and handling for the second quarter and prepares the following table: Activity Activity cost Cost driver Cost driver volume Order entry $24,000 Number of orders 1,200 orders Packaging 22,500 Number of windows 15,000 windows Delivery 30,800 Number of deliveries 1,400 deliveries General administration 39,000 Order value $1,950,000 Jack also provides activity data from two representative customers (Ray and Jerry), one stays and one is leaving. Ray Jerry Number of orders 45 14 Number of windows 2,000 2,000 Number of deliveries 55 14 Order value $260,000 $260,000 Required: As the consultant, please do the following.
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This note was uploaded on 10/29/2009 for the course ACC 066 taught by Professor Kwak during the Spring '08 term at DeAnza College.

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Demo-case-10 - ABM/ABC cost system: Demonstration Case...

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