Question

 Nerrod Company sells its products at $500 per unit, net 30. The

firm’s gross margin ratio is 40 percent. The firm has estimated the following operating costs:

Activity Cost Driver and Rate

sales calls 400 per visit

order processing 100 per order

deliveries 50 per order + .50 per mile

sales returns 60 per return and 3 restocking per unit returned

Nerrod Company has gathered the following data pertaining to activities it performed for two of its customers:

XBT NINTO

number of orders 10 2

mi,ber parts per order 500 2000

Sale return

Number of returns 4 10

Number of units returned 40 50

Number of sales calls 6 10

Miles per delivery 10 20

shipping terms FOB Factory FOB destination

What is Nerrod’s total sales-sustaining cost applicable to XBT as a customer?

I need step by step help with this problem.

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