Bridgewater Case Jeopardy

Background

100

Who is the owner of Bridgewater?

(*Tim Morrissey*)

200

Caroline Cooper assigned these two expense categories using each products of total sales dollars

(*Selling and shipping expenses*) 

300

Bridgewater’s ovens were able to capture initial market share because of this condition in the industry?

(*Few competitors*)

400

To support oven sales, Bridgewater expanded its sales team by adding this many sales reps?

(*six*)

Cost Allocation

100

How are materials assigned to oven and stoves

(*Per unit*)

200

What allocation assigns costs based on activities like number of orders or sales reps?

(*ABC Costing*)

300

What Activity base driver was used for the shipping costs?

(*Order Numbers*)

400

What was the breakdown of sales commission?

(*2% to Customer Allowances Fund, 3% to Employees (2% to the Sales Rep, ½% to Sales Manager, ½% to Sales VP))

Stoves vs Ovens

100

Which product line came first?

(*Stoves*)

200

What percent allocation was the oven and stoves for the Factory Support cost?

60% Oven

40% Stoves

300

What is the price difference between the ovens and stoves? 

(*$50*) 

400

What were the orders per unit for both ovens and Stoves?

Stove - (*10*)

Ovens - (*2*)

Assumptions

100

How did Caroline assume the split to general expenses?

(*50/50*)

200

What assumption did Caroline make that was 17% of sales dollars?

(*Shipping costs*)

300

This type of expense did not matter much because it hasn’t changed for several years.

 (*General Expenses*)

400

The assumption that shipping and selling costs are proportional to sales ignores these three differences between stoves and ovens.

(*Order size, shipping distance, and marketing effort*)