Allied Paper Product

942 WordsAug 31, 20134 Pages
1. Answer The use of data given in the question to calculate ABC based service charges is presented in the following table: Activity | Cost as Per Question | Activity Driver | Activity DriverUnits | Activity Based Cost | Storage | 1550,000$ | Number of Cartons | 350,000 | 4.43$ | Requisition Handling | 1801,000$ | Number of Requisitions | 310,000 | 5.81$ | Basic warehouse stock selection | 761,000$ | Number of Requisition Lines | 775,000 | 0.98$ | Pick-pack Activity | 734,000$ | Number of Lines requiring pick-pack | 697,500 | 1.05$ | Data entry | 612,000$ | Number of Requisition Lines | 775,000 | .79$ | Desktop delivery | 250,000$ | Number of Desktop Deliveries | 8,500 | 29.41$ | Total | 5708,000$ | | | | Note:- The activity driver unit for pick-up activity is calculated as: Number of requisitions estimated to be processed for 1992 = 310,000 Each requisition contains on average 2.5 lines so number of lines for 1992 = 310,000*2.5 = 775,000 Number of lines requiring pick-pack activity = 775,000*90% = 697,500 Note: All figures are rounded to nearest $ 2. Answer Distribution service cost for “customer A” and for “Customer B” Activity | Activity Based Cost | Activity Driver | Activity DriverUnits | Distribution Cost | | | | Customer A | Customer B | Customer A | Customer B | Storage | 4.43$ | Number of Cartons | 350 | 700 | 1,550$ | 3,100$ | Requisition Handling | 5.81$ | Number of Requisitions | 364 | 790 | 2,115$ | 4,590$ | Basic warehouse stock selection | 0.98$ | Number of Requisition Lines | 910 | 2,500 | 894$ | 2,455$ | Pick-pack Activity | 1.05$ | Number of Lines requiring pick-pack | 910 | 2,500 | 958$ | 631$ | Data entry | .79$ | Number of Requisition Lines | 364 | 790 | 719$ | 1,974$ | Desktop delivery | 29.41$ | Number of Desktop Deliveries | - | 26 | - | 765$ | Inventory handling | | | | |

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