Anton's Fresh Fish and Produce Is a Wholesale Distributor That

Essay

Anton's Fresh Fish and Produce is a wholesale distributor that operates in central Florida. An analysis of two of the company's customers, Seaside Spa and Sigma Assisted Living, reveals the data that follows the requirements for this problem for a recent 12-month period.
Anton's uses activity-based costing to determine the cost of servicing its customers. The company had total delivery costs during the year of $576,000 and 8,000 deliveries, along with cost of $765,000 for the administrative processing of 90,000 invoices.
Required:
A. Compute the pool rates for deliveries and invoice processing.
B. Compute the operating income that Anton's earned from these two customers.
C. Compute the total of customer-related costs (deliveries and invoice processing) for each customer as a percentage of gross margin, and analyze the results for management. Explain any significant differences that you find.