Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the...
Marvin’s Kitchen Supply delivers restaurant supplies throughout
the city. The firm adds 10 percent to the cost of the supplies to
cover the delivery cost. The delivery fee is meant to cover the
cost of delivery. A consultant has analyzed the delivery service
using activity-based costing methods and identified four
activities. Data on these activities follow.
| Cost Driver Volume | ||||||||
| Activity | Cost Driver | Cost | Driver Volume | |||||
| Processing order | Number of orders | $ | 66,000 | 6,000 | orders | |||
| Loading truck | Number of items | 195,000 | 150,000 | items | ||||
| Delivering merchandise | Number of orders | 84,000 | 6,000 | orders | ||||
| Processing invoice | Number of invoices | 70,000 | 5,000 | invoices | ||||
| Total overhead | $ | 415,000 | ||||||
Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow.
| City Diner | Le Chien Chaud | |||||
| Order value | $ | 79,000 | $ | 89,000 | ||
| Number of orders | 59 | 210 | ||||
| Number of items | 550 | 2,500 | ||||
| Number of invoices | 13 | 250 | ||||
Required:
a. What would the delivery charge for each customer be under the current policy of 10 percent of order value?
|
b. Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost of delivering to each customer.
|
Homework Answers
a. What would the delivery charge for each customer be under the current policy of 10 percent of order value?
|
b. Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost of delivering to each customer.
|
Add Answer to:
Marvin’s Kitchen Supply delivers restaurant supplies throughout
the city. The firm adds 10 percent to the...
Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the...
Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow. Cost Driver Volume Activity Cost Driver Cost Driver Volume Processing order Number of orders $ 105,000 7,000 orders Loading truck Number of items 285,000...
5.00 points Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent...
5.00 points Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow Cost Driver Volume Cost Driver S 84,000 105,000 5496.000 7.000 orders Processing order Loading truck Number of orders Number of items...
Karin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10% to the cost...
Karin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10% to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow: Activity Processing order Loading truck Delivery Invoicing Cost Driver # of orders #of items # of orders # of invoices Cost $84,000 165,000 96,000 75,600...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Activity Measure Total Cost Total Activity Customer deliveries Number of deliveries $ 525,100 5,900 deliveries...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Activity Measure Total Cost Total Activity Customer deliveries Number of deliveries $ 325,600 4,400 deliveries...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Activity Measure Total Cost Total Activity Customer deliveries Number of deliveries $ 495,900 5,700 deliveries...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
5.00 points Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow Cost Driver Volume Cost Driver S 84,000 105,000 5496.000 7.000 orders Processing order Loading truck Number of orders Number of items...
Karin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10% to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow: Activity Processing order Loading truck Delivery Invoicing Cost Driver # of orders #of items # of orders # of invoices Cost $84,000 165,000 96,000 75,600...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative...
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