22

Express Travel decides to price delivery services according to the results of a recent activity-based costing (ABC) study. The study indicates Express Travel should charge $17 per order, 2% of annual order value for general delivery costs, $3.20 per item, and $40 for delivery. A year later, Express Travel collected the following information for three of its customers: Cost driver Number of orders Number of deliveries Total number of items Annual order value Customer A 25 20 Customer B 15 20 3,000 $87,000 Customer C 19 30 14,000 $107,000 1,000 $127,000 What are the total delivery costs charged to Customer A during the year? Multiple Choice $4,850 O $6,965. O $6,265. O $19.560