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ts Alter's Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is
ts Alter's Home Center (AHC) sells renovation and remodeling products to both contractors and individual home owners. One of the services AHC offers is delivery of the purchased products to the customer's work site. Because not all customers take advantage of the delivery service option, ACH adds 10 percent to the cost of the products purchased to cover the delivery cost. A business intern spent the summer at ACH. The intern's assignment was to analyze the delivery service and recommend a better way to charge customers for using it. The intern, who had studied activity-based costing, identified the following activities and the data related to them: Activity Picking order Delivering order Handling complaints Total delivery cost Cost Driver Number of items Number of orders Number of complaints 30,000 orders Annual Cost Annual Driver Volume: $308,125 362,500 items 720,000 40,000 $ 1,068,125 160 complaints The intern selected two customers, who were frequent customers, to use as an illustration of the system: Wagner Remodeling and Burlington Contractors. The intern collected the following information on these two customers for the most recent six months: Total order value (before delivery charge). Number of orders Total number of items Number of delivery complaints Required: Burlington Contractors, Wagner Remodeling $15,000 20 $ 18,000 330 52 310 a. What would the delivery charge for each customer be under the current policy of 10 percent of order value? b. What would the activity-based costing system estimate as the cost of delivering to each customer? Required: a. What would the delivery charge for each customer be under the current policy of 10 percent of order value? b. What would the activity-based costing system estimate as the cost of delivering to each customer? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required What would the activity-based costing system estimate as the cost of delivering to each customer? Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. Wagner Remodeling Burlington Contractors Picking order $ 480 S 1,248 Delivering order 281 264 Handling complaints 250 1,250 Total cost $ 1,011 2,762 < Required A Required B > nts Skipped Print Emmons Lawn Maintenance (ELM) provides lawn and garden care for residential properties. In the current year, ELM maintains 94 properties and earns an average of $8,800 annually for each property. The owner of ELM is planning for the coming year. New building in the area is expected to increase volume by 39 percent. In addition, the owner estimates that the number of homeowners that will want ELM's service will increase by 29 percent. ELM plans to increase the price of service by 22.0 percent to cover expected increased wage and equipment costs. Required: Estimate revenues for Emmons Lawn Maintenance for the coming year. Note: Enter your answer rounded to the nearest whole dollar. Revenues nts Skopped i Print Bramell Park is an amusement park with an entrance fee that allows unlimited rides. Last year, the company sold 93,000 one-day admission tickets with an average price of $130 and 32,500 three-day admission tickets with an average price of $290. The park management expects one day admission ticket volume to decrease by 12 percent and three-day admission ticket volume to increase by 4 percent. At the same time, increased competition is expected to result in one-day ticket prices that are 15 percent lower than the current level and three-day ticket prices that are 10 percent lower than the current price. Required: Estimate admission revenues for Bramell Park for the coming year. Note: Do not round your intermediate calculations. Products One-day tickets Three day tickets Revenues
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