1. ingle and Dual Charging Rates

   Jeff McMillan owns a small neighborhood shopping mall. Of the 10 store spaces in the building, seven are rented by boutique owners and three are vacant. Jeff has decided that offering more services to stores in the mall would enable him to increase occupancy. He has decided to use one of the vacant spaces to provide, at cost, a gift-wrapping service to shops in the mall. The boutiques are enthusiastic about the new service. Most of them are staffed minimally, which means that every time they have to wrap a gift, phones go unanswered and other customers in line grow impatient. Jeff figured that the gift-wrapping service would incur the following costs: the store space would normally rent for $2,000 per month, part-time gift wrappers could be hired for $1,300 per month, and wrapping paper and ribbon would average $1.40 per gift. The boutique owners estimated the following number of gifts to be wrapped per month.

   Store	Number of Gifts Wrapped per Month
   The Stationery Station	175
   Arts & Collectibles	400
   Kid-Sports	100
   Java Jim's	75
   Designer Shoes	20
   Cristina's Closet	130
   Alan's Drug and Sundries	100

   After the service had been in effect for six months, Jeff calculated the following actual average monthly number of gifts wrapped for each of the stores.

   Store	Actual Average Number of Gifts Wrapped per Month
   The Stationery Station	160
   Arts & Collectibles	420
   Kid-Sports	240
   Java Jim's	10
   Designer Shoes	50
   Cristina's Closet	200
   Alan's Drug and Sundries	450

   Required:

   1. Calculate a single charging rate, on a per-gift basis, to be charged to the shops. If required, round your final answer to the nearest cent. $fill in the blank 1 per gift

   Based on the shops' actual number of gifts wrapped, how much would be charged to each shop using the single charging rate?

   Store	Total Charge
   The Stationery Station	$fill in the blank 2
   Arts & Collectibles	fill in the blank 3
   Kid-Sports	fill in the blank 4
   Java Jim's	fill in the blank 5
   Designer Shoes	fill in the blank 6
   Cristina's Closet	fill in the blank 7
   Alan's Drug and Sundries	fill in the blank 8

   2. Based on the shops' actual number of gifts wrapped, how much would be charged to each shop using the dual charging rate? If required, round the allocation percentages to 4 decimal places and round your computed allocation amount to the nearest cent.

   Store	Total Charge
   The Stationery Station	$fill in the blank 9
   Arts & Collectibles	fill in the blank 10
   Kid-Sports	fill in the blank 11
   Java Jim's	fill in the blank 12
   Designer Shoes	fill in the blank 13
   Cristina's Closet	fill in the blank 14
   Alan's Drug and Sundries	fill in the blank 15

   3. Which shops would prefer the single charging rate? Why?

   1. The Stationery Station
   2. Arts & Collectibles
   3. Kid-Sports
   4. Java Jim's
   5. Designer Shoes
   6. Cristina's Closet
   7. Alan's Drug and Sundries

   a, b and ca and db, e and fd, f and ga and d

   In the single rate method, fixed costs are included in the rate based on

   actualestimatedestimated

   usage. The single charging rate assigns less of the fixed cost to the shops using

   lessmoreless

   of the service.

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