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please help! Diversion Inc. competes with Grizzly Inc. in the distribution of mechanical pencils. Diversion also identifies its three primary activities and cost pools as
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Diversion Inc. competes with Grizzly Inc. in the distribution of mechanical pencils. Diversion also identifies its three primary activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2020: E: (Click the icon to view the activity and cost pool details.) For 2020, Diversion buys 250,000 pencil packs at an average cost of $3.80 per pack. Diversion plans to use cost-plus pricing. Read the requirements. Since Diversion is using a cost-plus pricing strategy, we must first determine the total cost and the total cost per unit of the pencil packs. Calculate the total costs and then the costs per unit. Total Per Unit Costs: Purchase cost of pencil packs Ordering costs Receiving and storage Shipping Total costs Now calculate the prospective selling price (1) if Diversion marks up the purchase costs of the pencil packs by 30%. (Round any intermediary calculations and your final answer to the nearest cent.) (1) The prospective selling price of the pencil packs if Diversion marks up the purchase costs by 30% is Data Table Finally, calculate the prospective selling price (2) If Diversion marks up the full cost of the pencil packs by 10% (2) The prospective selling price of the pencil packs if Diversion marks up the full cost by 10% is Quantity of Cost Driver Cost per Unit of Cost Driver Requirements Activity Cost Driver 1. Placing and paying for orders of pencil packs Number of orders 2. Receiving and storage Loads moved 3. Shipping of pencil Number of packs to retailers shipments 700 $75 per order 3,500 $50 per load Calculate the prospective selling price (1) if Diversion marks up the purchase costs of the pencil packs by 30% and (2) if Diversion marks up the full cost of the pencil packs by 10%. 1,500 $70 per shipmentStep by Step Solution
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