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Dakota Office Products Study Case
Essay specific features
Written by:
Edward Q
Date added:
April 28, 2013
Level:
University
Grade:
A
No of pages / words:
3 / 836
Was viewed:
6245 times
Rating of current essay:
Essay content:
Calculate the activity cost-driver rate for each DOP activity in 2000.
Activity cost-driver rates:
Activity One: process cartons in and out of the facility
Rate=(90% of Warehouse Personnel Expense + Cost o Items Purchased)/cartons processed
Rate=(90%*2,400,000+35,000,000)/80,000=464.5 $/per carton
Activity Two: the new desktop delivery service
Rate=(10% of Warehouse Personnel Expense + Delivery Truck Expenses)/desktop deliveries
Rate=(10%*2,400,000+200,000)/2000=220 $/per carton
Activity Three: order handling
Rate=( Warehouse Expenses + Freight)/ number of orders
Rate=(2,000,000+450,000)/(16,000+8,000)=102...
displayed 300 characters
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So Customer A spend $1224.96 and Customer B spend $102,08 which is $8983.04 more money spent on Customer B.
5.
What are the limitations, if any, to estimates of the profitability of the two customers?
- Lack of information about distance taken for “desktop” delivery, so we can’t compute Delivery per Labor Hour because each time there is different distance form the warehouse which makes different cost per delivery...
displayed 300 characters
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