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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 Required B >

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 Required B >

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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**Marvin’s Kitchen Supply Delivery Cost Analysis** Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. To cover the delivery cost, the firm adds 10 percent to the cost of supplies. A consultant used activity-based costing methods to analyze the delivery service, identifying four key activities. Below is the data for these activities: ### Activity-Based Costing Data | Activity | Cost Driver | Cost | Cost Driver Volume | |-----------------------|----------------------|----------|-----------------------------| | Processing order | Number of orders | $75,000 | 5,000 orders | | Loading truck | Number of items | $150,000 | 100,000 items | | Delivering merchandise| Number of orders | $90,000 | 5,000 orders | | Processing invoice | Number of invoices | $72,000 | 4,000 invoices | | **Total overhead** | | **$387,000** | | ### Customer Delivery Data Marvin's Kitchen Supply serves multiple customers, including City Diner and Le Chien Chaud. Here is the data concerning orders and deliveries to these two customers: | | City Diner | Le Chien Chaud | |--------------------------|------------|----------------| | Order value | $75,000 | $90,000 | | Number of orders | 52 | 110 | | Number of items | 600 | 1,500 | | Number of invoices | 12 | 150 | This data helps Marvin's Kitchen Supply understand the delivery costs associated with each customer and adjust their pricing strategy accordingly.
Transcribed Image Text:**Marvin’s Kitchen Supply Delivery Cost Analysis** Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. To cover the delivery cost, the firm adds 10 percent to the cost of supplies. A consultant used activity-based costing methods to analyze the delivery service, identifying four key activities. Below is the data for these activities: ### Activity-Based Costing Data | Activity | Cost Driver | Cost | Cost Driver Volume | |-----------------------|----------------------|----------|-----------------------------| | Processing order | Number of orders | $75,000 | 5,000 orders | | Loading truck | Number of items | $150,000 | 100,000 items | | Delivering merchandise| Number of orders | $90,000 | 5,000 orders | | Processing invoice | Number of invoices | $72,000 | 4,000 invoices | | **Total overhead** | | **$387,000** | | ### Customer Delivery Data Marvin's Kitchen Supply serves multiple customers, including City Diner and Le Chien Chaud. Here is the data concerning orders and deliveries to these two customers: | | City Diner | Le Chien Chaud | |--------------------------|------------|----------------| | Order value | $75,000 | $90,000 | | Number of orders | 52 | 110 | | Number of items | 600 | 1,500 | | Number of invoices | 12 | 150 | This data helps Marvin's Kitchen Supply understand the delivery costs associated with each customer and adjust their pricing strategy accordingly.
**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. **Instructions:** Complete this question by entering your answers in the tabs below. **Tabs:** - Required A - Required B --- **Section for Required A:** *Question: What would the delivery charge for each customer be under the current policy of 10 percent of order value?* | Restaurant | Delivery Charge Per Customer | |-----------------|-----------------------------| | City Diner | | | Le Chien Chaud | | --- *Note: Please utilize the tabs to input your answers for each requirement.*
Transcribed Image Text:**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. **Instructions:** Complete this question by entering your answers in the tabs below. **Tabs:** - Required A - Required B --- **Section for Required A:** *Question: What would the delivery charge for each customer be under the current policy of 10 percent of order value?* | Restaurant | Delivery Charge Per Customer | |-----------------|-----------------------------| | City Diner | | | Le Chien Chaud | | --- *Note: Please utilize the tabs to input your answers for each requirement.*
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