E6.30 LO 6.9 Process costing: book order agency All Texts and Stationery Ltd (ATS) is a major provider of texts and stationery to secondary schools throughout Australia. Students submit their order to ATS through their school at the beginning of the year. All Texts and Stationery fills the order in three stages:

(a) An order is received from the school and entered into the ATS inventory order system.

(b) The books and stationery required to fill the order are taken from inventory, packed and dispatched to the student.

(c) Payment is received from the student and processed.

The costs of these three processes in the year just ended are listed below: Cost Staff salaries Equipment depreciation Equipment insurance Telephone Receipt of order $ 120000 1008000 192000 Packing and dispatch of order $300000 348000 132000 Receipt of payment $ 72000 288000 96000 Data processing Postage Consumables 9600 7 200 2400 18000 4800 14.400 372000 7200 84000 2400 During the year, ATS processed 22000 student orders. Required 1. Calculate the cost per order for each process. 2. Calculate the total cost per order. 3. Why wouldn't the total cost per order provide a reliable estimate of the costs incurred to process each order? Explain your answer by outlining factors that may affect the cost of an individual order.