Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

 

 

image text in transcribedimage text in transcribed

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 Total overhead Cost Driver Number of orders Number of items Cost $ 52,000 Cost Driver Volume Driver Volume 4,000 orders Number of orders Number of invoices 143,000 64,000 48,000 $307,000 110,000 items 4,000 orders 3,000 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 $71,000 51 700 11 $81,000 130 1,700 170 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. Complete this question by entering your answers in the tabs below. Required A Required B What would the delivery charge for each customer be under the current policy of 10 percent of order value? City Diner Le Chien Chaud Delivery Charge Per Customer < Required A Required B > 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 Total overhead Cost Driver Number of orders Number of items Number of orders Number of invoices Cost Driver Volume Driver Volume Cost $ 52,000 4,000 orders 143,000 64,000 48,000 $307,000 110,000 items 4,000 orders 3,000 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 $71,000 51 700 11 $81,000 130 1,700 170 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. Complete this question by entering your answers in the tabs below. Required A Required 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. (Do not round intermediate calculations.) Processing order Loading truck Delivering merchandise Processing invoice Total cost City Diner Le Chien Chaud $ 0 $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey of Accounting

Authors: Carl S Warren

5th Edition

9780538489737, 538749091, 538489731, 978-0538749091

More Books

Students also viewed these Accounting questions