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Marvin S Kitchen Supply Delivers Restaurant Supplies Throughout City Firm Adds 10 Percent Q17776960

Marvin’s Kitchen Supply delivers restaurant supplies throughoutthe city. The firm adds 10 percent to the cost of the supplies tocover the delivery cost. The delivery fee is meant to cover thecost of delivery. A consultant has analyzed the delivery serviceusing activity-based costing methods and identified fouractivities. Data on these activities follow:

Cost Driver Volume

Activity
CostDriver
Cost
Driver Volume

Processingorder
Number oforders
$
60,000

4,000
orders

Loadingtruck
Number ofitems

266,000

140,000
items

Deliveringmerchandise
Number oforders

72,000

4,000
orders

Processinginvoice
Number ofinvoices

54,000

3,000
invoices

Totaloverhead

$
452,000

Two of Marvin’s customers are City Diner and Le Chien Chaud.Data for orders and deliveries to these two customers follow:

City Diner
LeChien Chaud

Order value
$
77,000

$
87,000

Number oforders

57

190

Number ofitems

450

2,300

Number ofinvoices

11

230

Required:
a. What would the delivery charge for eachcustomer be under the current policy of 10 percent of ordervalue?
City Diner Deliery Charge per Customer: _____
Le Chien Chaud Delivery Charge Per Customer: ____
b. Calculate the cost of each activity for bothrestaurants to determine the total activity-based costing estimateof the cost of delivering to each customer. (Do not roundintermediate calculations.)
Processing Order City Diner, Le Chien Chaud;_____,_____
Loading Truck Delivering Merchandise City DIner, LeChien Chaud; ____,____
Processing Invoice City Diner, Le Chien Chaud;____,____
Total Cost City Diner, Le Chien Chaud;_____,_____
 
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