Question

Stage 2 ABC for a Wholesale Company Information is presented for the activity costs of Oxford Wholesale Company: Activity Cost per Unit of Activity Driver Customer relations per month $95.00 per customer Selling 0.11 per sales dollar Accounting 5.00 per order Warehousing 0.50 per unit shipped Packing 0.25 per unit shipped Shipping 0.20 perpound shipped

The following information pertains to Oxford Wholesale Company’s activities in Massachusetts for the month of March 2014:_______.
Number of orders 240
Sales revenue $124,400
Cost of goods sold $ 68,940
Number of customers 30
Units shipped 4,700
Pounds shipped 70,500
Required:
Determine the profitability of sales in Massachusetts for March 2014.

Answer 1

Answer: $20,101

Step-by-step explanation:

Profitability of sales = Sales revenue - Cost of goods sold - Activity costs

Activity costs = Customer relation cost + Selling costs + Accounting + Warehousing + Packing + Shipping

= (95 * 30) + (0.11 * 124,400) + (5 * 240) + (0.5 * 4,700) + (0.25 * 4,700) + (0.2 * 70,500)

= $‭35,359‬

Profitability of sales = 124,400 - 68,940 - 35,359

= $20,101