Exercise 10-30 (Algo) Activity-Based Costing of Customers (LO 10-3, 4) Alter's Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased products to the customer's work site. Because not all customers take advantage of the delivery service option, ACH adds 10 percent to the cost of the products purchased to cover the delivery cost. A business intern spent the summer at ACH. The intern's assignment was to analyze the delivery service and recommend a better way to charge customers for using it. The intern, who had studied activity-based costing, identified the following activities and the data related to them: Activity Picking order Delivering order Handling complaints Total delivery cost Cost Driver Number of items Number of orders Number of complaints $ 294,790 Annual Cost Annual Driver Volume 359,500 items 28,500 orders 145 complaints 598,500 35,380 $ 928,670 The intern selected two customers, who were frequent customers, to use as an illustration of the system: Wagner Remodeling and Burlington Contractors. The intern collected the following information on these two customers for the most recent six months: Wagner Remodeling Burlington Contractors Total order value (before delivery charge) Number of orders $ 13,500 17 $ 15,000 46