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Rupert's Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover
Rupert's 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 Processing order Loading truck Delivering order Billing Total overhead Cost Driver Number of orders Number of itens Number of orders Number of invoices 290,000 Activity Cost $ 84,000 Cost Driver Volume 6,000 orders 145,000 items 102,000 85,000 $ 561,000 6,000 orders 5,000 invoices 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) Number of orders Total number of items Number of invoices Required: $ 86,000 66 900 14 $ 96,000 236 1,600 180 a. What would the delivery charge for each customer be under the current policy of 6 percent of order value? b. What would the activity-based costing system estimate as 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 6 percent of order value? Delivery Charge Per Customer McLean Designs Neveux Appliances Drau 4 of 6 Nevt Complete this question by entering your answers in the tabs below. Required A Required B What would the activity-based costing system estimate as the cost of delivering to each customer? Processing order Loading truck Delivering order Billing Total cost McLean Designs Neveux Appliances < Required A
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