Leche Frescais a wholesaler that commercializes dairy products in the metropolitan area of Mexico City. The company serves both modern (convenience stores and supermarkets) and traditional (mom and pop stores) channels. There are two main differences in how Lecha Fresca attends these two markets: order processing and delivery.

In the case of traditional channel, sales representatives visit in-person the small mom and pop store to take the customer order. This is different formodern channel. In this case, a sales representative makes a call to the convenience store or supermarketto take a new order. Usually, 80% of sales representatives' weekly time is spent on serving traditional stores, while 20% is dedicated to modern stores. Additionally, 60% of IT equipment hours are used to process the orders fromtraditional channel and 40% from modern channel every week.

The delivery process is also different. Due to small drop sizes, the company trucks visit more frequently (2 or 3 times a week) the same mom and pop store. In contrast, a weekly shipmentis fairly common among modern retailers.On average, 80% of drivers' weekly time is spent delivering products to traditional retailers (20% formodern stores). Similarly, 70% of fuelis consumed distributing the goods to traditionalstores(30% tomodern stores) each week.

On a weekly basis, 250 orders are received from 50 traditional retailers and 350 orders come from 18 modern stores.

Leche Frescahas identified the following relevant activities:

• Order processing, traditional channel
• Order processing, modernchannel
• Delivery, traditional channel
• Delivery, modernchannel

Part 1

As a first step to understand the cost to serve customers, you need to find out what the costs for the activities are. Leche fresca has identified the following relevant weekly costs:

• Personnel(sales representative), order processing: 670
• Other than personnel, order processing: 290
• Personnel (drivers and helpers), delivery: 1100
• Fuel and operating costs, delivery: 1030

Based on the information above, what are the total cost that should be allocated to the following two activities?

Order processing for traditional channel:

(Round you answer to the nearest integer. Answer in dollars without commas or currency symbols)

Delivery for modern channel:

(Round you answer to the nearest integer. Answer in dollars without commas or currency symbols)

Part 2

Having calculated the total cost, you want to find the cost driver rate for each activity. After talking to the management of the company, you decide on the following cost drivers for the activities:

• Order processing for traditional channel: Number orders
• Order processing for modern channel:: Number of orders
• Delivery for traditional channel: Number of customers
• Delivery for modern channel: Number of customers

Based on the information above, what are the cost driver rates for the following two activities?

Order processing for modern channel:

(Answer in dollars with two decimals without commas or currency symbols. Note that these are not the same activities as in Part 1)

Delivery for traditional channel:

(Answer in dollars with two decimals without commas or currency symbols. Note that these are not the same activities as in Part 1)

Part 3

Having calculated the cost driver rates, you are interested in finding out what the cost-to-serve would be to attend new city areas. In particular, you are interested in the following two city areas: