Question:
Lowry Locomotion conducts several ABC studies and learns that a large proportion of its distributors are located outside of the local United Parcel Service (UPS) shipping zone, so that the standard shipping fee charged by Lowry is lower than the actual freight cost that it incurs. Accordingly, Lowry determines the specific UPS shipping zone for all of its customers, loads this information into the customer master file for each customer, and charges them a more accurate freight fee based on the zone in which they are located.