Question
ABC Cost Rate Purchase orders $ 216 per purchase order Deliveries $ 112 per delivery Expedited deliveries $ 131 per expedited delivery Customer visits $
ABC Cost Rate | |
Purchase orders | $ 216 per purchase order |
Deliveries | $ 112 per delivery |
Expedited deliveries | $ 131 per expedited delivery |
Customer visits | $ 62 per customer visit |
Pharmacy Company has two customers CVX and Ma & Pa with data as follows:
CVX | Ma & Pa | |
Selling price per unit | $ 40.00 | $ 40.00 |
# of units sold | 4,500 | 3,800 |
Manufacturing cost per unit | $ 14.00 | $ 14.00 |
# of purchase orders | 25 | 155 |
# of deliveries | 107 | 183 |
# of expedited deliveries | 189 | 250 |
# of customer visits | 44 | 85
Pharmacy Companys management accountant gathered the following ABC rate information: Using the information in the tables above and allocating indirect support costs using ABC to customers, what is the Operating Income for the CVX customer? . A. $ 117,000 B. $ 59,400 C. $ 44,871 D. $ 72,129 |
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