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 cost.

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 Cost $104,000 Cost Driver Volume Driver Volume 8,000 orders Number of items Number of orders Number of invoices. 240,000 128,000 112,000 $584,000 160,000 items. 8,000 orders 7,000 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 $81,000 $91,000 61 650 15 2301 1,100 130 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. 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 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

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

Accounting 111

Authors: Carl S. Warren

1st Edition

1111065624, 978-1111065621

More Books

Students also viewed these Accounting questions

Question

6. What questions would you suggest should be included?

Answered: 1 week ago