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The 601 Blue Jean Company has decided to allocate the cost of its Warehouse and Distribution Center to its customers using activity-based costing, in order to better assess profitability by customer. The warehouse manager determines that the only costs that are economically feasible to trace directly to the customer are outbound freight costs. The manager then decides that the following overhead cost pools should be allocated to customers using the following cost drivers:

Overhead Cost Pool	Cost Driver (Allocation Base)
Order Processing Department	Number of individual orders processed for that customer
Order Fufilling Department	Number of line items on all pull-tickets for that customer
Quality Control Department	Number of cartons shipped to that customer
Shipping Department	Number of cartons shipped to that customer

Following are relevant data for each overhead cost pool:

Order Processing Department
Total costs for this department	$3,000,000
Total number of orders processed	200,000
Order Filling Department
Total costs for this department	$4,000,000
Total number of line-items on all pull tickets	4,000,000
Quality Control Department
Total costs for this department	$500,000
Total number of cartons shipped	2,000,000
Shipping Department
Total costs for this department	$7,500,000
Total number of cartons shipped	2,000,000

Following is information pertaining to two customers:

7-9-11 Stores:
Sales revenue for this year	$2,400,000
Number of orders	500
Number of pull ticket line-items	100,000
Number of cartons	50,000
Outbound freight costs	$75,000
Men's Large and Big Stores:
Sales revenue for this year	$1,500,000
Number of orders	250
Number of pull ticket line-items	20,000
Number of cartons	40,000
Outbound freight costs	$56,000

Required:

A) Compute the overhead rates for each of the four overhead cost pools.

B) Calculate the amount of overhead that would be applied to 7-9-11 Stores

C) Calculate the amount of overhead that would be applied to Men's Large & Big Stores.

D) Explain (in one or two sentences) or show (by calculation) how your answers to Parts (B) and (C) would change if the company combined Quality Control and Shipping into one overhead cost pool, and allocated overhead for this cost pool to customers based on the number of cartons shipped to that customer.

A detailed step-by-step on how to find each requirement would be super helpful! The amount of info is overwhelming, not sure what's relevant or where to use what. Thanks!

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