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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 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 items Number of orders Number of invoices Activity Cost $ 90,000 120,000 108,000 90,000 Cost Driver Volume 6,000 orders 80,000 items 6,000 orders 5,000 invoices $ 408,000 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: $ 73,000 $ 83,000 53 106 1,300 100 560 13 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 Novoux Annlinnene

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 items Number of orders Number of invoices Activity Cost $ 90,000 120,000 108,000 90,000 Cost Driver Volume 6,000 orders 80,000 items 6,000 orders 5,000 invoices $ 408,000 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: $ 73,000 $ 83,000 53 106 1,300 100 560 13 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 Novoux Annlinnene

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4BE: Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and...
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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 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 items Number of orders Number of invoices Activity Cost $ 90,000 120,000 108,000 90,000 Cost Driver Volume 6,000 orders 80,000 items 6,000 orders 5,000 invoices $ 408,000 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: $ 73,000 $ 83,000 53 106 1,300 100 560 13 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 Novoux Annlinnene
Transcribed Image Text: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 items Number of orders Number of invoices Activity Cost $ 90,000 120,000 108,000 90,000 Cost Driver Volume 6,000 orders 80,000 items 6,000 orders 5,000 invoices $ 408,000 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: $ 73,000 $ 83,000 53 106 1,300 100 560 13 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 Novoux Annlinnene
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