A 3PL warehouse provides contract services to 3 customers: A, B and C. The direct annual costs of the whole warehouse are as follows:Space -$2,000,000;Labor -$800,000;MHE (material handling equipment) -$200,000.Total overhead is $600,000.

There is space for 10,000 pallet locations split between the customers as follows: A 50%; B 25%, and C 25%. The total labor hours per year are 50,000; they are split between the customers as follows: A 50%; B 40%, and C 10%. MHE is used to serve the customers in the same proportions as labor.

a)What is the rate of overhead in percent?

b)What is the average warehouse labor rate per hour with overhead in dollars and cents?

c) What is the share of customer B in total overhead contribution as a percentage?

d) What is the amount in total overhead contribution of customer A in whole dollars?

e) How much overhead in dollars will remain undistributed if customer C reduces its storage needs by 20% and handling (i.e. labor and MHE use) by 10%.