Marvin S Kitchen Supply Delivers Restaurant Supplies Throughout The City The Firm Adds 10 Percent To The Cost Of The Su 1 (358.95 KiB) Viewed 10 times
Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow. Activity Processing order Loading truck Delivering merchandise Processing invoice Total overhead Order value Number of orders Cost Driver Number of orders Number of items Number of orders Number of invoices Number of items Number of invoices 60 600 14 Cost Driver Volume Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City Diner Le Chien Chaud $80,000 $90,000 220 1,000 120 Cost $ 84,000 217,000 105,000 90,000 $496,000 Driver Volume 7,000 orders 155,000 items 7,000 orders 6,000 invoices
Required: a. What would the delivery charge for each customer be under the current policy of 10 percent of order value? b. Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost of delivering to each customer. Complete this question by entering your answers in the tabs below. Required A Required B What would the delivery charge for each customer be under the current policy of 10 percent of order value? Delivery Charge Per Customer City Diner Le Chien Chaud
Required: a. What would the delivery charge for each customer be under the current policy of 10 percent of order value? b. Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost of delivering to each customer. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost of delivering to each customer. (Do not round intermediate calculations.) City Diner Le Chien Chaud Processing order Loading truck Delivering merchandise Processing invoice Total cost
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