KELOMPOK 3

ANNISA RAMADHANI (2140512001)

NELIA PUTRI ANGGRAINI (2240512003)

CASE 11-4 GARVEY COMPANY

Garvey Company sells machine parts to industrial equipment manufacturers fo

r an average price of $0.75 per part. There are two types of customers: tho
se who place small, frequent orders and those who place larger, less freque
nt orders. Each time an order is placed and processed, a setup is required.
Scheduling is also needed to coordinate the many different orders that come
in and place demands on the plant’s manufacturing resources. Garvey also i
nspects a sample of the products each time a batch is produced to ensure th
at the customer’s specifications have been met. Inspection takes essential
ly the same time regardless of the type of part being produced. Garvey’s c
ost accounting department has provided the following budgeted data for cust
omer-related activities and costs (the amounts expected for the coming yea
r):

Frequently Less Frequently

Ordering Customer Ordering Customer

s s

Sales orders 10,000 1,000

Average order size 1,000 10,000

Scheduling hours 17,500 2,500

Number of setups 12,500 2,500

Inspection 12,500 2,500

Average unit cost* $0.40 $0.40

*This cost does not include the cost of the following “customer-related”
activities:
 Customer-related activity costs:

Processing sales orders $1,100,000

Scheduling production 600,000

Setting up equipment 1,800,000

Inspecting batches 2,400,000

Total $5,900,000

Required:

1. Assign the customer-related activity costs to each category of customers

in proportion to the sales revenue earned by each customer type. Calculate
the profitability of each customer type. Discuss the problems with this mea
sure of customer profitability.

2. Assign the customer-related activity costs to each customer type using a

ctivity rates. Now calculate the profitability of each customer category. A
s a manager, how would you use this information?

Pembahasan

1. The profitability of each customer type using the proportion of the sal
es revenue earned by each customer type.

Frequently Less Frequently

Ordering Customers Ordering Customers

Revenue $7,500,000 $7,500,000

(1,000 x 10,000 x $0.75)

Less: Average cost per unit sold 4,000,000 4,000,000

(1,000 x 10,000 x $0.40)

Customer-related activity 2,950,000 2,950,000

costs
 ($5,900,000 : 2)

Profit $550,000 $550,000

 Berdasarkan perhitungan di atas, dapat dilihat bahwa kedua jenis customer memiliki prof
itabilitas yang sama karena jumlah total unit yang terjual kepada kedua jenis customer ini
sama dan customer-related activity costs telah dialokasikan berdasarkan
pendapatan yang diperoleh.

 Permasalahan yang timbul ketika menggunakan perhitungan ini adalah dalam pengalokas
ian customer-related activity costs seharusnya dialokasikan berdasarkan c
ost driver-nya seperti scheduling hours, number of setups, dan inspeksi
yang dilakukan untuk setiap jenis customer. Jika kita bandingkan cost d
river untuk kedua jenis pelanggan, kita dapat melihat bahwa scheduling
hours untuk FOC 5 kali lipat dari Less FOC; number of setups dan inspek
si untuk FOC 5 kali lipat dari Less FOC; dan jumlah pesanan penjualan d
ari FOC adalah 10 kali lipat dari Less OFC. Dengan memiliki perbedaan y
ang signifikan seperti ini, penggunaan pengalokasian customer-related a
ctivity costs berdasarkan pendapatan yang diperoleh dianggap tidak sesu
ai.

2. Cost driver

Amount Cost Driver No. of cost dr $ per cost driv

iver er

Processing sa $1,100,00 No. of sales 11,000 100

les orders 0 order

Scheduling pr 600,000 Scheduling ho 20,000 30

oduction urs

Setting up eq 1,800,000 No. of setups 15,000 120

uipment

Inspecting ba 2,400,000 Inspections 15,000 160

tches

The profitability of each customer type using activity rates.

FOC Less FOC

Revenue $7,500,000 $7,500,000

(1,000 x 10,000 x $0.75)

Less: Average cost per unit s 4,000,000 4,000,000

old

(1,000 x 10,000 x $0.40)

$3,500,000 $3,500,000

Customer-related activites

Processing sales orders 1,000,000 100,000

 (100 x 10,000)

 (100 x 1,000)

Scheduling production 525,000 75,000

 (30 x 17,500)

 (30 x 2,500)

Setting up equipment 1,500,000 300,000

 (120 x 12,500)

 (120 x 2,500)

Inspecting batches 2,000,000 400,000

 (160 x 12,500)

 (160 x 2,500)

Total Costs 5,025,000 875,000

Profitability (1,525,000) 2,625,000

 Berdasarkan perhitungan di atas, Less FOC lebih menguntungkan dibanding

FOC dimana Less FOC akan menghasilkan laba yang lebih besar daripada FO
C karena biaya yang digunakan untuk penjualan produk Less FOC lebih sed
ikit dibandingkan dengan FOC.

 Sebagai seorang manager, saya akan menawarkan diskon kepada Less FOC se
rta memberikan layanan khusus, dan menanyakan customer experience terha
dap produk yang dijualkan agar perusahaan mendapatkan feedback terkait
 produk sehingga dapat memenuhi customer satisfaction. Hal ini dilakukan
agar perusahaan dapat mempertahankan loyalty dari customer tersebut.