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Q.5 Laraib Distributions have been accused of discriminating against its small-order customers (25 to 50 cases) in southern territory when compared with same class of customers in other territory. The company has classified its marketing costs by territories. It now plans to allocate the territorial costs to different categories of customers within each territory. Tabulation of the average distribution costs per year in southern territory shows: Advertising; Direct to customers Rs.36,000 Radio and newspapers 90,000 Sales salaries 360,000 Sales commission 480,000 Delivery 288,000 Sales travel cost 108,000 Collection cost 84,000 Rs. 1446.000 The sales department has furnished the following data to assist prorating costs in southern territory between small, medium and large order customers. Small order Medium order Large order customers customers customers 1500,000 2,220,000 3,500,000 2,500 2,000 1,500 1,000,000 1,500,000 2,500,000 10 20 30 1,500 1,500 2,000 Net sales (Rs.) Number of sales order taken Number of cases of product sold Relative shipping cost (per order) (Rs.) Number of customers Relative number of kilometers Travelled (per day per salespersons) Number of salespersons 16 In the collection department, the bookkeeping cost per order handled is about one rupee. Each customer is mailed a statement at month end. The customers make single month remittances on account All salespersons are paid the same salary and each salesperson works with a single class of customer. Required: Prepare a statement showing allocation of the distribution costs of southern territory to the three classes of customers. Indicate the base or bases on which each allocation is made (Round off all computations suitably)

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