Marvins 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.

		Cost Driver Volume
Activity	Cost Driver	Cost			Driver Volume
Processing order	Number of orders	$	104,000			8,000	orders
Loading truck	Number of items		240,000			160,000	items
Delivering merchandise	Number of orders		128,000			8,000	orders
Processing invoice	Number of invoices		112,000			7,000	invoices
Total overhead		$	584,000

Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow.

	City Diner			Le Chien Chaud
Order value	$	81,000		$	91,000
Number of orders		61			230
Number of items		650			1,100
Number of invoices		15			130

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.

What would the delivery charge for each customer be under the current policy of 10 percent of order value? Delivery Charge Per Customer City Diner Le Chien Chaud 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.) City Diner Le Chien Chaud Processing order Loading truck Delivering merchandise Processing invoice Total cost $ 0 $ 0