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Detour Inc. competes with Gonzalo Inc. in the distribution of mechanical pencils. Detour also identifies its three primary activities and cost pools as ordering, receiving
Detour Inc. competes with Gonzalo Inc. in the distribution of mechanical pencils. Detour also identifies its three primary activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2020: (Click the icon to view the activity and cost pool details.) For 2020, Detour buys 250,000 pencil packs at an average cost of $3.80 per pack. Detour plans to use cost-plus pricing. Since Detour is using a cost-plus pricing strategy, we must first determine the total cost and the total cost per unit of the pencil packs. Calculate the total costs and then the costs per unit. Total X Requirements Costs: Purchase cost of pencil packs Ordering costs Receiving and storage Shipping Calculate the prospective selling price (1) if Detour marks up the purchase costs of the pencil packs by 30% and (2) if Detour marks up the full cost of the pencil packs by 5%. Total costs Print Done Data table Quantity of Cost per Unit of Cost Cost Driver Driver Cost Driver Number of orders 400 $75 per order Activity 1. Placing and paying for orders of pencil packs 2. Receiving and storage 3. Shipping of pencil packs to retailers Loads moved 4,100 $50 per load Number of shipments 1,500 $90 per shipment
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