2) Joe SPORTING EQUIPMENT DECIDES TO PRICE DELIVERY SERVICE ACCORDING TO AN ACTIVITY BASED COSTING STUDY. $43 PER ORDER, $5 PER ITEM AND $16 FOR DELIVERY. HE ALSO DECIDES TO CHARGE FOR GENERAL DELIVERY COSTS BY 7% OF ORDER VALUE. COST DRIVER JASON VIC NUMBER OF ORDERS 66 76 NUMBER OF ITEMS 340 675 NUMBER OF DELIVERIES 124 115 VALUE OF ORDERS $125,000.00 $135,000.00

A. COMPUTE THE COST OF DELIVERY FOR EACH CUSTOMER. B. CALCULATE OUT THE DELIVERY COST AS A PERCENTAGE OF VALUE OF ORDERS.

3) Joe BANK HAS TWO BRANCHES, MAIN AND COUNTRY. HIS COMPANY HAS 3 SERVICE DEPARTMENTS, INFORMATION TECH (IT), PERSONNEL AND FINANCE. DATA IS AS FOLLOWS DEPARTMENT COST # IT HOURS # OF EMPLOYEES # FINANCE TRANS IT $425,000 0 10 77 PERSONNEL $550,000 2333 0 85 FINANCE $742,000 1200 8 0 MAIN $800,000 3500 50 1200 COUNTRY $725,000 4500 35 1350 TOTALS $3,242,000 11533 103 2712

ALL COSTS ARE ALLOCATED TO THE TWO BRANCHES. IT COST IS ALLOCATED ON # OF IT HOURS. PERSONNEL COST IS ALLOCATED BASED ON # OF PEOPLE FINANCE COSTS ARE ALLOCATED ON # OF FINANCE TRANSACTIONS

USING THE DIRECT METHOD WHAT IS THE TOTAL COST THAT WILL BE ALLOCATED TO THE TWO BRANCHES?

WHAT IS THE TOTAL COST OF EACH BRA?