Tylon;s hardware uses a flexible budget to develop planning information for its warehouse operations. For 20x9, the company anticipated that it would have 96,000 sales units for 664 customer shipments. Avg. storage bin usage for various inventories was estimated to be 200 per day. Costs aned cost drivers were determined to be as follows.
item fixed variable cost dr.
product handling 10,000 $1.25 per 100unit
storage 3.00 per bin
utilities 1,000 1.50 per 100unit
shipping clerks 1,000 1.00 per shipment
supplies .50 per shipment
During the year, the warehouse processed 90,000 units for 600 customer shipments. The workers used 225 storage bins on average each day to sort, store, and process goods for shipment. The actual costs for 20x9 were:
Item Actual cost
product handling 10,900
shipping clerks 1,400
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