# Answer to Chapter 6

Topics: Costs, Profit, Truck driver Pages: 4 (697 words) Published: June 22, 2013
(a)
(1) Cost rate of processing cartons through the facility
= (warehouse expenses + warehouse personnel expense)/ number of cartons =\$2000, 000+(\$2570,000-\$250,000)/80,000
=\$54/carton
(2) Cost rate of entering electronic and manual customer order =order entry expenses/total working hours of order entry operators =\$840,000/(16*1500h)
=\$35/h
(3) Cost rate of shipping cartons on commercial carriers
=Freight expenses/ carton shipped
=\$450,000 /75000cartons
=\$6/carton
(4)The cost per hour for desktop deliveries
= (Delivery truck expense+ truck driver compensations)/ total working hours of truck drivers = (\$200,000+\$250,000)/(1500*4)h
=\$75/h
(b)
Order1|
price| | 610|
Acquisition cost| | 500|
Cost of processing| 1*54| 54|
Cost of ordering| 1*0.1*35| 3.5|
Cost of shipping| 1*6| 6|
Cost of financing| 1*1%*610| 6.1|
Total cost | | 569.6|
profit| | 40.4|
Order2|
price| | 634|
Acquisition cost| | 500|
Cost of processing| 1*54| 54|
Cost of ordering| (0.15+0.075*1)*35| 7.875|
Cost of shipping| 4*75| 300|
Cost of financing| 4*1%*634| 25.36|
Total cost | | 887.235|
profit| | -253.235|
Order3|
price| | 6100|
Acquisition cost| | 5000|
Cost of processing| 10*54| 540|
Cost of ordering| 1*0.1*35| 3.5|
Cost of shipping| 10*6| 60|
Cost of financing| 1*1%*6100| 61|
Total cost | | |
profit| | |
Order4|
price| | 6340|
Acquisition cost| | 5000|
Cost of processing| 10*54| 540|
Cost of ordering| (0.15+0.075*10)*35| 31.5|
Cost of shipping| 4*75| 300|
Cost of financing| 4*1%*6340| 253.6|
Total cost | | 6125.1|
profit| | 214.9|
Order5|
price| | 6340|
Acquisition cost| | 5000|
Cost of processing| 10*54| 540|
Cost of ordering| (0.15+0.075*10)*35| 31.5|
Cost of shipping| 6*10| 60|
Cost of financing| 4*1%*6100| 244|
Total cost | | 5875.5|
profit| | 464.5|

| Order1|...

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