Taylor's Cafe Supply Company delivers restaurant supplies throughout the city. Taylor's adds 4% to the order cost to cover the delivery cost. The delivery fee is meant to just cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities are:

\begin{array}{ll}\text { Activity}&\text { Cost Driver}&\text { Cost}&\text { Driver Volume}\\\text { Process order } & \text { number of orders }&\$25,000 &\text { 4,000 orders }\\\text { Load truck } & \text { number of items } &50,000&\text {80,000 items}\\\text { Deliver merchandise } & \text { number of orders } &30,000&\text { 4,000 orders }\\\text { Process invoice } & \text { number of invoices }&24,000&\text {6,000 invoice}\\\text { Total overhead }&&\$129,000\end{array}

Two of Taylor's customers are City Diner and Le Chien Chaud. Below are data on orders and deliveries to these two customers:

\begin{array} { l r r } & \text { City Diner } & \text { Le Chien Chaud } \\\text { Order value } & \$ 24,000 & \$ 32,000 \\\text { Number of orders } & 50 & 100 \\\text { Number of items } & 550 & 1,600 \\\text { Number of invoices } & 12 & 120\end{array}

Required:
(a) What would be the delivery charge for each customer under the current policy of 4% of order value?
(b) What would the activity-based costing system estimate as the cost of delivering to each customer?

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