Question
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A distributor delivers groceries throughout the eastern province. This distributor adds 7% to the order cost to cover the delivery cost. The delivery fee is meant to just cover the cost of delivery. The delivery service has been analyzed using activity-based costing methods and identified the following four activities. Data on these activities are: Two of its customers are 3M and 4B stores. Below are data on orders and deliveries to these two customers: What would be the deliver.' charge for each customer under the current policy of 7% of order value? What would the activity-based costing system estimate as the cost of delivering to each customer? You are provided with the following information about resources: If the sales for the period totaled 1,200,000, compute the unused resource capacity for each preceding item.
Explanation / Answer
