Q.. The budgeted distribution costs for next year comprise transport costs of £568,000and customer order processing costs of £29,050. It is estimated that in the next year, 8,300 orders will be processed and that the delivery vehicles will travel 400,000 kilometres.One of the company’s customers has indicated that it will place 50 orders in the next year, each of which will involve a journey of 130 kilometres by delivery vehicle.What is the distribution cost for this customer? Show all workings Mini-scenario 2MiceAreUs Limited manufactures two types of computer mouse; traditional wired (TW),traditional bluetooth (TB). These are in continuous production at the company's factory inDunbar, Scotland.Each mouse incorporates around 25 component parts that are bought from outsidesuppliers.Sales have recently been declining and the Board of Directors is considering a proposal todiscontinue TW and TB and replace them by a large range of ergonomically designedcomputer mice.These new mice would be highly customised for individual corporate customers and wouldbe frequently renewed to adopt the latest technologies and allow for market changes. Theywould be produced in short, discontinuous batches with production lines switching frequentlyfrom one product to another.The CEO claims that the adoption of activity-based costing will bring benefits to thebusiness, but the CFO is keener on a lifecycle costing approach.

Activity based costing (ABC) is the costing method which allocates the overheads (activity…

Answered: MiceAreUs Limited manufactures two…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 6E: Keith Golding has decided to purchase a personal computer. He has narrowed his choices to two: Brand...

See similar textbooks

Related questions

Question

Q.. The budgeted distribution costs for next year comprise transport costs of £568,000
and customer order processing costs of £29,050. It is estimated that in the next year, 8,300 orders will be processed and that the delivery vehicles will travel 400,000 kilometres.
One of the company’s customers has indicated that it will place 50 orders in the next year, each of which will involve a journey of 130 kilometres by delivery vehicle.
What is the distribution cost for this customer? Show all workings

Mini-scenario 2
MiceAreUs Limited manufactures two types of computer mouse; traditional wired (TW),
traditional bluetooth (TB). These are in continuous production at the company's factory in
Dunbar, Scotland.
Each mouse incorporates around 25 component parts that are bought from outside
suppliers.
Sales have recently been declining and the Board of Directors is considering a proposal to
discontinue TW and TB and replace them by a large range of ergonomically designed
computer mice.
These new mice would be highly customised for individual corporate customers and would
be frequently renewed to adopt the latest technologies and allow for market changes. They
would be produced in short, discontinuous batches with production lines switching frequently
from one product to another.
The CEO claims that the adoption of activity-based costing will bring benefits to the
business, but the CFO is keener on a lifecycle costing approach.

Expert Solution

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Decision to Sell before or after additional processing

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions