Exercise 10-31 (Algo) Activity-Based Costing of Customers (LO 10-3, 4) Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow. Activity Processing order Loading truck Delivering merchandise Processing invoice Cost Driver Number of orders Number of items Number of orders Number of invoices Cost Driver Volume Cost Driver Volume $ 70,000 5,000 orders 161,000 115,000 items 85,000 5,000 orders Total overhead 68,000 $384,000 4,000 invoices Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. Order value Number of orders Number of items Number of invoices City Diner Le Chien Chaud $72,000 52 750 12 $82,000 140 1,800 180 Required: a. What would the delivery charge for each customer be under the current policy of 10 percent of order value? b. Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost of delivering to each customer.