Barrett eSellers is an online retail store offering a variety of products. As a part of its business model, it offers free returns. The returns are processed at the Returns Processing Facility (RPF) near one of the air freight hubs. The RPF checks the returns for documentation (receipt and so on) and condition of the returned item and determines the disposition of the item (return to stock, resale as a “used” item, or trash). The system at RPF is designed so that all returns that start the process on any given day are processed that day.
During May, the RPF processed 37,500 returns with a dollar sales value of $3,675,000. The costs incurred at the RPF during May were as follows.
Required a. Compute the cost per return for May at the RPF. b. Compute the cost per dollar sales value for items returned for May at the RPF.