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	$	126,000			9,000	orders
Loading truck	Number of items		264,000			165,000	items
Delivering merchandise	Number of orders		153,000			9,000	orders
Processing invoice	Number of invoices		136,000			8,000	invoices
Total overhead		$	679,000

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	$	82,000		$	92,000
Number of orders		62			240
Number of items		700			1,200
Number of invoices		10			140

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.

A-City Diner____________

Le Chein Chaud _____________

B- City Dinner Le Chien Chaud

Processing order

Loading truck

delivering Merch

Processing Invoice

Total Cost