c) State the main difference between the above two methods of assigning overheads. (6 marks) (Total: 30 marks) Question 3 (30%) Better and faster (B&F), a market follower in the internet grocery retailing industry established four years ago, was hoping to grasp the market opportunities of online shopping which has becoming fashionable and increasingly popular among today's consumers. To be competitive in the market, the company has been expanding quickly and investing substantially in support services to improve its service quality hoping to acquire more market shares. Currently, B&F operates three departments: meat and seafood, packaged food and drinks and vegetables and fruits. The revenue and cost of sale for the first half year of 20X6 were as follow. Meat and sea food Packaged food and drinks Vegetables and fruits $ $ $ Revenue 360,000 850,000 480,000 Cost of sale 230,000 600,000 300,000 Total operating support costs were $339,000. B&F currently uses cost of sale as the base to apportion the support services costs. However, the company is considering that activity-based costing (ABC) may be more appropriate based on the following information. $ Allocation basis Order handling 68,500 No. of orders Customer service 115,500 No. of inquiries Rent of warehouse 30,000 Occupied oor area (n12) Packing and delivery 85,000 Packing and delivery hours Computer system maintenance 40,000 Hours provided Total 339,000 Meat and sea Packaged food and drinks Vegetables and fruits food No. of orders 165 355 165 No. of inquiries 100 45 55 Occupied floor area (m2) 70 150 80 Packing and delivery hours 223 2,168 1,009 l Page 5 r J L Hours provided 65 55 80