The 601 Blue Jean COmpany has decided to allocate the cost of its Warehouse and Distribution Center to its customers using activity-based costing, in order to better assess profitability by customer. The warehouse manager determines that the only costs that are economically feasiable to trace directly to the customer are outbound freight costs. The manager then ecides that the following overhead cost pools should be allocated to customers using the following cost drivers:

(a) Compute the overhead rates for each of the four overhead cost pools

(b) Calculate the amount of overhead that would be applied to 7-9-11 Stores

(c) Calculate the amount of overhead that would be applied to Men's Large & Big Stores

(d) Explain (in one or two sentences) or show (by calculation) how your answers to Parts (B) and (C) would change if the company combined Quality Control and Shipping into one overhead cost pool, and allocated overhead for this cost pool to customers based on the number of cartons shipped to that customer.

Overhead Cost Pool Order Processing Department Number of individual orders processed for that customer Order Filling Department Number of line items on all pull-tickets for that customer Quality Control Department Number of cartons shipped to that customer Cost Driver (Allocation Base) Shi ment Number of cartons shipped to that customer Following are relevant data for each overhead cost pool: Order Processing Department Total costs for this department Total number of orders processed $3,000,000 200,000 Order Filling Department Total costs for this department Total number of line-items on all pull tickets $4,000,000 4,000,000 Quality Control Department Total costs for this department Total number of cartons shipped $500,000 2,000,000 Shipping Department Total costs for this department Total number of cartons shipped $7,500,000 2,000,000 Following is information pertaining to two customers: 7-9-11 Stores: Sales revenue for the year Number of orders Number of pull ticket line-items Number of cartons Outbound freight costs $2,400,000 500 100,000 50,000 $75,000 Men's Large and Big Stores: Sales revenue for the year Number of orders Number of pull ticket line-items $1,500,000 250 20,000 40,000 $56,000 Number of cartons Outbound freight costs Required: A) Compute the overhead rates for each of the four overhead cost pools. B) Calculate the amount of overhead that would be applied to 7-9-11 Stores C) Calculate the amount of overhead that would be applied to Men's Large& Big Stores D) Explain (in one or two sentences) or show (by calculation) how your answers to Parts (B) and (C) would change if the company combined Quality Control and Shipping into one overhead cost pool, and allocated overhead for this cost pool to customers based on the number of cartons shipped to that customer