Clarke Industries Collects Information on Two Customers for the Past

question 122

Essay

Clarke Industries collects information on two customers for the past year:
Clarke estimates the following activity-based costs:
An in-stock order is an order for which all the items included are in inventory at the time the order is received.Required:
Compute the customer specific contribution of each customer for the year using:
a.16% of revenues as the allocation rate for customer-related costs.
b.The activity-based costing approach.

Recognize economies and diseconomies of scale in production.

Distinguish between explicit and implicit costs, including economic and accounting profits.

Identify the least cost plant size for a given range of output.

Comprehend marginal cost and its calculation.

---

Definitions:

Opportunity Cost

The value of the next best alternative foregone as a result of making a decision; the cost of missing out on the second best choice while selecting among several options.

Supply Of Labor

The sum of hours employees are prepared and capable of working for a specified rate of pay during a particular time frame.

Labor Supply

The aggregate amount of time laborers are prepared and capable of working at a certain salary level.

Technological Advances

Refers to the progression and innovation in technology, leading to new products, processes, or the improvement of existing technologies.