b) Hector Gonzales runs the Floral Art Company, which supplies floral arrangements

to three large supermarket chains throughout Australia. Management has become

concerned about the rising costs associated with the process and dispatch of orders. An

activity analysis of the indirect costs identified the following customer-related costs.

Acitvity cost poo] Orders processing Returns processing Delivery Rush orders Sales visits Cost driver Number of orders Number of returns Number of deliveries Number of rush orders Number of visits Estimate (1 indirect costs $200,000 $50,000 $100,000 $70,000 $20,000 Total Use of cost expected driver use of cost Supermarket driver* customer 1 2 3 450 300 100 50 100 50 25 25 700 400 200 100 50 10 20 20 100 50 25 25