1. : FedEx and UPS allocate their service industry costs using activity-based costing. The following table summarizes the costs and cost drivers:

Activity	FedEx Total Cost ($)	Cost Driver	Cost Driver Quantity	UPS Total Cost ($)
Package Delivery	$3,000,000	Number of packages	500,000 packages	$2,600,000
Logistics Support	$4,500,000	Miles driven	1,000,000 miles	$4,000,000
Customer Service	$2,000,000	Number of inquiries	100,000 inquiries	$1,800,000
Total	$9,500,000			$8,400,000

• FedEx delivered 400,000 packages, drove 1,200,000 miles, and handled 80,000 inquiries.
• Allocate service industry costs per package, per mile driven, and per inquiry for FedEx and UPS using activity-based costing.
• Discuss how differences in logistics support costs impact FedEx's and UPS's service reliability and cost management.