Midwest office Products

What are the major activities involved in the distribution center? What are the cost drivers of these activities?

a. Personnel Expenses (Warehouse, truck driver) 2570000

compensation for truck driver 250000

warehouse personnel expenses 2020000

Warehouse expenses (excluding personnel) 2000000

Base on the interviews and data in this case, estimate:

Cost of processing cartons through the facility

Cost of shipping cartons on commercial carriers

cost per hour for desktop deliveries

b.Order entry expenses 840000

c. Commercial freight 450000

d.cost per hour=

Compensation for turck driver 250000+delivery truck expenses 200000+cost for desktop delivery 450000

1500x4=6000 hrs.

450000/6000=75

Explain the difference in profitability of the five orders calculated by the ABC system and the company's existing system?

Base on your analysis above, what actions should John Malone take to improve Midwest's profitability?

What issues, barriers,