90.2K

Verified Solution

Link Copied!

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:

$\backslash$table$[[$Activity$,$Cost Driver,Annual Cost,Annual Driver Volume$],[$Picking order,Number of items,$303,660,361,500$ items$],[$Delivering order,Number of orders,$678,500,29,500$ orders$],[$Handling complaints,Number of complaints,$38,440,155$ complaints$],[$Total delivery cost,,$$1,020,600,]]$

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:

$\backslash$table$[[$Total order yalue $($before delivery charge$),$Remodeling,Burlington$],[$Number of orders,$14,500,$$$17,000$

Answer & Explanation Solved by verified expert

See Answer