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Q2 (20 marks) Activity Cost Cost driver Marketing $30,000 $500,000 of sales Customer 10,000 5,000 customer service Order 5,000 100 orders execution Warehousin 5,000 50

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Q2 (20 marks) Activity Cost Cost driver Marketing $30,000 $500,000 of sales Customer 10,000 5,000 customer service Order 5,000 100 orders execution Warehousin 5,000 50 product lines 8 Instructions: 1) Compute the relevant rates for the company. 2) Justify the scenarios under which it is reasonable to use the rates and drivers. 3) What is the negative impact of this costing system

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