Figure 18-1 The Bayview Corporation manufactures bottled water with an average manufacturing cost of $2 per case (a case contains 24 bottles).Bayview sold 1,000,000 cases last year to the following types of customers:
The supermarket chains order electronically through EDI which costs $25,000 annually.Bayview is responsible for shipping costs, which totaled $0.50 a case and special labels costing $0.02 per bottle.
The drugstore chains have special handling costs of $0.20 a case and increased administrative assistance costing $45,000 per year.
The gas station chains require special marketing promotions that cost $50,000.Sales commissions of 10% are paid.
Local pharmacies have special handling costs of $0.10 per case and sales commissions are paid to agents costing $0.25 per case.Bad debt expense averages 10% of sales.
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Refer to Figure 18-1.What customer type has the least total cost per case ?

Question

Figure 18-1 The Bayview Corporation manufactures bottled water with an average manufacturing cost of $2 per case (a case contains 24 bottles).Bayview sold 1,000,000 cases last year to the following types of customers:
 The supermarket chains order electronically through EDI which costs $25,000 annually.Bayview is responsible for shipping costs, which totaled $0.50 a case and special labels costing $0.02 per bottle.
The drugstore chains have special handling costs of $0.20 a case and increased administrative assistance costing $45,000 per year.
The gas station chains require special marketing promotions that cost $50,000.Sales commissions of 10% are paid.
Local pharmacies have special handling costs of $0.10 per case and sales commissions are paid to agents costing $0.25 per case.Bad debt expense averages 10% of sales.
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Refer to Figure 18-1.What customer type has the least total cost per case ?

Quizplus · Accepted Answer

The Answer is B

Figure 18-1 the Bayview Corporation Manufactures Bottled Water with an Average