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Applying Traditional Cost Allocation Methods to Customer Profitability Analysis Bountiful Harvest Distribution delivers supplies to small grocers throughout the region. Bountiful currently allocates indirect costs

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Applying Traditional Cost Allocation Methods to Customer Profitability Analysis Bountiful Harvest Distribution delivers supplies to small grocers throughout the region. Bountiful currently allocates indirect costs based on a percentage of total revenue. The indirect costs include order processing, truck loading, delivery, and invoice processing. Estimated revenue for the year is $5.16 Million. Indirect cost data are shown below. 4 Indirect costs Order processing Truck loading Delivery Invoice processing Total indirect costs Estimated cost $50,000 $100,000 $60,000 $48,000 $258,000 Three of Bountiful's customers are Besy's Corner Market, Bill's Fine Foods, and Amy's City Market. Below are data on expected orders and deliveries to these three customers: Rosy's Corner Market $60,000 $48,000 Bill's Fine Foods $90,000 $64,000 Amy's City Market $150,000 $120,000 Revenue Direct cost of supplies sold Required: 1. Determine the Gross Profit (Revenue - direct and indirect costs) for each of the three customers under the current allocation method

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