Answer:

A:

Per Product SKU Allocation Rate
Per Machine Hour Allocation Rate
Per Direct Labor Hour Allocation Rate
Per Product Pallet Allocation Rate
Per Square Foot Allocation Rate
Per Customer Order Allocation Rate

Information:

Potential Overhead Sources	Expected Annual Cost	Description
Maintenance of robotic helpers	$ 1,485,900	The fleet of robots that help our stocking and picking efforts require weekly maintenance in order to keep them running correctly.
Property taxes	$ 1,744,400	Our fulfillment center is quite large, and as a result we pay a considerable amount of property taxes to the local municipality. The property taxes we pay are decided once per year by an assessment process that the city controls.
Maintenance and repairs of shipping vans	$ 3,842,800	A fleet of shipping vans delivers customer orders, and these vans need periodic maintenance and repairs. Shipping vans have scheduled maintenance every 5,000 miles, and our average customer delivery has around half a mile of driving distance.
Packing supplies	$ 1,765,100	The company needs a wide array of cardboard boxes, packing tape, and box filler material in order to fulfill orders for our many products. We have a sophisticated planning system that ensures that the packing supplies we have on hand every day are sufficient to meet the upcoming needs of our customers.
Break room costs	$ 236,700	When our workers are on break we offer them several perks in the break room, including free coffee and snacks, as well as a set of massage chairs. When we have busy periods it is clear that the amount of coffee and snacks that are consumed increases dramatically.
Depreciation of shelving	$ 699,500	The cost of the shelving, and it's surprisingly short useful life, combine to cause substantial annual depreciation.
Management salaries	$ 1,741,000	We employ several managers who spend their time scheduling workers, interviewing new hires, and managing any issues that arise in the fulfillment center. For the past several years our management team has remained stable, and other than small cost of living adjustments to their salaries we have not seen any increase in their costs.
Climate control system maintenance	$ 305,000	Keeping the inside of our fulfillment center warm in the winter and cool in the summer requires complicated heating and cooling equipment that adds some cost to our operations. The maintenance of our climate control system happens once every 3 months.
Cellular phone contracts	$ 34,200	Procurement specialists need to be reachable, both by their managers and the customers that they work with. The company buys unlimited cellular phone plans for our procurement specialists so that they do not need to worry about data usage or talk time.
Robot disposal	$ 23,600	When robots fail many of their parts are hazardous and need to be carefully disposed of, which adds considerably to their cost. Because of our excellent maintenance workers very few robots need to be disposed of, and when they do it is usually because of how many years they have been in service, not how many miles they have traveled.
Stocking equipment maintenance	$ 69,500	When a pallet is unpacked so that it individual items can be accessed, we use equipment to facilitate the process. The equipment that we use to break down pallets is automatically maintained after every 350 pallet unpacking operations.
Travel and entertainment	$ 990,700	Our procurement specialists will often travel to potential suppliers who are too far to reach by car, and will often incur costs in order to entertain their clients. We set the travel budget in order to ensure that all of our suppliers are visited once every year or two.
Picker appreciation plan	$ 45,800	We incentivise employees to perform at their best by offering recognition and a small bonus to the most productive workers each month. During busier months the amount of the awards we give to the most productive employees rises, as do the number of categories we give awards for.
Company car maintenance	$ 713,100	In order to manage relationships with the companies that sell on our marketplace we maintain a fleet of vehicles that procurement specialists can use to visit with suppliers. The number of cars we maintain in our fleet is small, and the intensity of the maintenance generally does not change considerably during the year.
Purchase order clerical costs	$ 981,700	The constant maintenance of stock levels in the many products we offer, and the costs of keeping a record of our purchases of those products requires expenses for wages, computers, and software. As customer demand increases ahead of the holidays or other busier times the costs we see from purchasing products increases substantially.
Online Advertisements	$ 2,057,800	The company regularly runs targeted keyword advertising on major search engines. The company usually runs more advertisements during busy periods of the year.
Workers compensation insurance	$ 3,049,500	Sometimes our workers are injured on the job. When this happens our regular payments into a workers compensation insurance plan allow them to receive support during the time that they cannot work. We pay into the workers compensation insurance plan based on the total cost of employee wages, and we must pay into the plan for both our year-round staff and the extra help we bring in during busier times.
Depreciation of robotic helpers	$ 1,938,800	Our upfront investment in the stocking and picking robots means that we see substantial annual depreciation expenses.
Picker training	$ 1,846,900	The workers who pick the products for our customer orders receive extensive training in order to help them safely execute their jobs, which can be very physically taxing. The company changes the amount and intensity of our picker training courses as the number of pickers changes during the year.
Maintenance of shelving	$ 528,300	The heavy duty shelving that stores the pallets of products that arrive at the fulfillment center sometimes break and need to be repaired. Most of the wear and tear on the shelving occurs when pallets need to be taken down from or loaded onto to the shelves.
Electricity costs	$ 109,800	Our warehouse has substantial electrical requirements, mostly to maintain a favorable climate for the goods that are stored there, and to light the space. Our electricity bill has both a significant fixed and a significant variable component.
Shipping department scheduling costs	$ 346,600	Determining the daily route of each shipping van is accomplished through a computer system that is periodically maintained and improved. We usually update the shipping department scheduling software during April each year.
Forklift maintenance	$ 267,300	The forklifts that transport pallets between the receiving area and the stocking area need regular maintenance in order to operate well. Forklifts are maintained by our in-house technician after every 500 hours of use. During quiet periods some of our fleet remains idle, so drivers must track which forklift they use, and how long they used it each day.
Wages of cleaning staff	$ 506,200	During the night shift a team of cleaners sweep the warehouse floor and ensure that no hazards exist that could jeopardize worker safety. We hire the same team of cleaners year-round.
Robot testing and programming	$ 998,500	Maintaining the software that allows the robots to be so helpful for both stocking and picking is a constant effort. The team that works on our robot software sees fairly consistent expenses each year.
Conveyor belt maintenance	$ 427,300	After the items have been packed into boxes, a conveyor belt system transports them to the correct shipping van. The high speed conveyor belt wears down faster when more boxes are distributed using it.
Financial Statement Audit Costs	$ 601,900	Every year the company hires outside auditors to ensure that our financial statements faithfully reflect the financial results and position of the company.
Strategic planning	$ 1,937,300	Determining which products we should include on our website takes significant effort, since both past sales data and future trends need to be considered. The marketing and strategy team works at a consistent pace year round.
Other Forecasted Information	Forecast	units		Regression Information
Number of product stock keeping units (SKU)	16,430	SKUs		Intercept Estimate	$ 9,934
Number of semi-autonomous machine hours	183,427	hours per year		Standard Error	$ 514
Number of direct labor hours	198,973	hours per year		Slope Small	$ 0.034
Number of product pallets received	31,995	pallets per year		Standard Error	$ 0.131
Number of customer orders	1,472,128	orders per year		Slope Large	$ 0.190
Fulfillment center square footage	88,700	sq. ft.		Standard Error	$ 0.001
Square footage of procurement	2,100	sq. ft.
Square footage of receiving and stocking	22,500	sq. ft.
Square footage of picking	60,800	sq. ft.		Investment Information
Square footage of shipping	3,300	sq. ft.		Initial Cost	$ 7,500,000	dollars
Direct labor costs	$ 15.90	dollars per hour		Discount Rate	18.90%	percent per year
Average small product direct material costs	$ 11.40	dollars per unit		Useful Life	5	years
Average large product direct material costs	$ 37.23	dollars per unit		Salvage Value	$ 67,500	dollars
Small product orders per SKU	105	orders per year per SKU		Tax Rate	26.80%	percent
Large product orders per SKU	70	orders per year per SKU		Working Capital	$ 514,600	dollars
Percent of customer orders that are small	56.0%	percent
Small product items per pallet	103	items
Large product items per pallet	27	items
Small product average price	$ 24.19	dollars per item
	Procurement	Stocking	Picking	Shipping	units
Small product labor time	0.00	0.035	0.048	0.024	hours
Large product labor time	0.00	0.062	0.080	0.029	hours
Small product machine time	0.00	0.040	0.045	0.000	hours
Large product machine time	0.00	0.094	0.081	0.000	hours