Exercise 10-30 (Static) Activity-Based Costing of Customers (LO 10-3, 4) Alter's Home Center (AHC) sells renovation...

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Exercise 10-30 (Static) Activity-Based Costing of Customers (LO 10-3, 4) 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 Annual Cost $286,000 Annual Driver volume 357,500 items 522,500 32,400 $ 840,900 27,500 orders 135 complaints Handling complaints Total delivery cost Cost Driver Number of itens Number of orders Number of 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 onders Total number of items Number of delivery complaints Remodeling Burlington Contractors $12,500 $13,000 15 42 310 1 305 6 Required: e. 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? 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 10 percent of order value? Wagner Remodeling Gurlington Contradors Delivery Charge Per Customer Exercise 10-30 (Static) Activity-Based Costing of Customers (LO 10-3, 4) 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 Annual Cost $286,000 Annual Driver volume 357,500 items 522,500 32,400 $ 840,900 27,500 orders 135 complaints Handling complaints Total delivery cost Cost Driver Number of itens Number of orders Number of 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 onders Total number of items Number of delivery complaints Remodeling Burlington Contractors $12,500 $13,000 15 42 310 1 305 6 Required: e. 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? 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 10 percent of order value? Wagner Remodeling Gurlington Contradors Delivery Charge Per Customer