Mustaine manufacturing has two classes of distributors: jit distributors and non-jit distributors. the jit distributor places small, frequent orders and the non-jit distributor tends to place larger, less frequent orders. both types of distributors purchase the same product. the customer activities and costs for the previous quarter are found below: jit non-jit sales orders 300 20 sales calls 25 25 service calls 150 75 average order size 100 1,000 manufacturing cost/unit $50 $50 customer costs: processing sales orders $200,000 selling goods $120,000 servicing goods $150,000 total $470,000. calculate the activity rate for processing sales orders.
(a) $625 per order
(b) $889 per order
(c) $182 per order
(d) $667 per order
(e) $1.47 per order

(A) $625 per order

Explanation:

Processing a sales order shall be based on the number of orders processed.

As the total orders processed are:

JIT = 300

Non JIT = 20

Therefore, total orders = 320

Total cost to be allocated = $200,000 that is the order processing cost of previous quarter.

Cost per order shall be

= $625 per order.

Note: The order size do not matter.

Therefore, correct option is:

(A) $625 per order

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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