Ruperts Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The finance team at RAW has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow:

Activity	Cost Driver	Activity Cost	Cost Driver Volume
Processing order	Number of orders	$ 65,000	5,000	orders
Loading truck	Number of items	266,000	140,000	items
Delivering order	Number of orders	80,000	5,000	orders
Billing	Number of invoices	64,000	4,000	invoices
Total overhead		$ 475,000

Two of Rupert's customers are McLean Designs and Neveux Appliances. Data for orders and deliveries to these two customers follow:

	McLean Designs	Neveux Appliances
Order value (total)	$ 85,000	$ 95,000
Number of orders	65	226
Total number of items	850	1,500
Number of invoices	13	170

Required:

1. What would the delivery charge for each customer be under the current policy of 6 percent of order value?
2. What would the activity-based costing system estimate as the cost of delivering to each customer?