Question: Please use table 1 2 . 5 on p . 3 5 8 ( 3 8 6 ) of the Richards book for this exercise

Please use table 12.5 on p.358(386) of the Richards book for this exercise without any changes given in exercise
4. Assume that the cost of one pallet storage is $10 per week, inbound (intake) handling is $2.50 per pallet and
the cost of outbound handling (dispatch) is $4.00 per pallet. All overhead is applied at a rate of 20% to both
storage and handling. Assume the week consists of seven days, Monday through Sunday. In a closed-book
contract where charges are billed on a weekly basis and include 15% profit applied to all costs, the 3PL uses
minimum daily average pallet storage requirement of 100 pallets and minimum weekly inbound and outbound
handling requirements of 350 pallets each to base the charges on if the actual daily average usage numbers are
below the minima. The charges on the bill are itemized as storage, inbound handling, and outbound handling.
16. What will the customer be billed for storage for that week if the parties use the average daily pallet method
(scenario 2)?
17. What is the agreed contract charge (price) per storage of one pallet per week?
18. What will the customer be billed for inbound handling for that week?
19. What is the total charge for that week?
20. In an open book or cost-plus contract, a total profit may be the last item on the bill after the cost subtotal.
What will this profit line item be under these conditions for that week?
21. Answer question 16 under the modified terms of exercise 4.
22. Answer question 19 under the modified terms of exercise 4.

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