Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to coverthe 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.ActivityProcessing orderLoading truckDelivering merchandiseProcessing invoiceTotal overheadOrder valueNumber of ordersNumber of itemsNumber of invoices.Cost DriverNumber of ordersNumber of itemsNumber of ordersNumber of invoicesTwo 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$75,000$90,000Required A Required B5260012Cost Driver Volume1101,500150Processing orderLoading truckDelivering merchandiseProcessing invoiceTotal costCost$ 75,000150,00090,00072,000$387,000Driver Volume5,000 orders100,000 items5,000 orders4,000 invoicesRequired: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 deliveringto each customer.Complete this question by entering your answers in the tabs below.Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost ofdelivering to each customer. (Do not round intermediate calculations.)City DinerLe Chien Chaud Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to coverthe 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.ActivityProcessing orderLoading truckDelivering merchandiseProcessing invoiceTotal overheadOrder valueNumber of ordersNumber of itemsNumber of invoicesCost DriverNumber of ordersNumber of itemsNumber of ordersNumber of invoicesTwo 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$75,000$90,0001101,500150Required ACost Driver Volume5260012Cost$ 75,000150,00090,00072,000$387,000Required BCity DinerLe Chien ChaudDriver Volume5,000 orders100,000 itemsRequired: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 deliveringto each customer.Complete this question by entering your answers in the tabs below.5,000 orders4,000 invoicesWhat would the delivery charge for each customer be under the current policy of 10 percent of order value?Delivery ChargePer Customer

Activity-based costing refers to the method in which the overheads are assigned to each product or…

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 Cost Driver Number of orders Number of items Number of orders Number of invoices Order value Number of orders Number of items Number of invoices 52 600 12 Cost Driver Volume Driver Volume 5,000 orders 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 $75,000 $90,000 110 1,500 150 Cost $ 75,000 150,000 90,000 72,000 $387,000 100,000 items 5,000 orders 4,000 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.

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 Cost Driver Number of orders Number of items Number of orders Number of invoices Order value Number of orders Number of items Number of invoices 52 600 12 Cost Driver Volume Driver Volume 5,000 orders 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 $75,000 $90,000 110 1,500 150 Cost $ 75,000 150,000 90,000 72,000 $387,000 100,000 items 5,000 orders 4,000 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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. Cost Driver Volume Activity Cost Driver Cost Driver Volume Processing order Number of orders $ 42,000 3,000 orders Loading truck Number of items 243,000 135,000 items Delivering merchandise Number of orders 51,000 3,000 orders Processing invoice Number of invoices 34,000 2,000 invoices Total overhead $ 370,000 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 Order value $ 76,000 $ 86,000 Number of orders 56 180 Number of items 400 2,200…
Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 17,850 $ 95,480 $ 39,590 The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top- management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of…
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Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $12 per pound. A box of glasses weighs 2 pounds, a box of fine china weighs 4 pounds, and a box of everyday dinnerware weighs 6 pounds. a Determine the shipping and handling activity cost to be allocated to each unit of product. Glasses Fine China Everyday dinnerware b Determine the total shipping and receiving costs to be allocated to the fine china if 2,300 boxes are shipped.