Alrex company is using an activity-based costing (ABC) system. The company produces and sells two products: Basic and Pro. The company consists of two departments Production (where all manufacturing activities are taken) and Marketing (which engages in selling and admin activity only). The ABC system includes in unit product costs all costs easily associated with units. In addition, in the ABC system, there are four major indirect activities: Machine Setups, Special Processing, Factory Supervision, and Customer Relation The prices, direct material cost (DM), shipping cost and direct labor hours (DLHs) are given below for one unit of the product, as well as the total units produced and sold. Shipping Cost Units $ 2 6 Product Price DM D LHS Hourly Wage-DL Basic $180 $501 10 $320 Pro $320 580 512 2 The company collected the data for ABC as follows: 6,000 4.000 .000 Estimated OH cost Activity Measure Activity Cost Pool Activity measures used Basic Pro 60120 6.000 10.000 Machine Setup Special Processing Factory Supervision Customer Relation (10 customers) of setups Machine hours DLH of customers S472.500 $ 360,000 $ 224,000 $ 240,000 How much is the ABC customer margin of customer B? (Choose the closest amount.) Multiple Choice O All of the other answers are incorrect. O 0 $ 135,500 O $ 159,500 O $ 151.500 Alrex company is using an activity-based costing (ABC) system. The company produces and sells two products: Basic and Pro. The company consists of two departments Production (where all manufacturing activities are taken) and Marketing (which engages in selling and admin activity only). The ABC system includes in unit product costs all costs easily associated with units. In addition, in the ABC system, there are four major indirect activities: Machine Setups, Special Processing, Factory Supervision, and Customer Relation The prices, direct material cost (DM), shipping cost and direct labor hours (DLHs) are given below for one unit of the product, as well as the total units produced and sold. Shipping Cost Units $ 2 6 Product Price DM D LHS Hourly Wage-DL Basic $180 $501 10 $320 Pro $320 580 512 2 The company collected the data for ABC as follows: 6,000 4.000 .000 Estimated OH cost Activity Measure Activity Cost Pool Activity measures used Basic Pro 60120 6.000 10.000 Machine Setup Special Processing Factory Supervision Customer Relation (10 customers) of setups Machine hours DLH of customers S472.500 $ 360,000 $ 224,000 $ 240,000 How much is the ABC customer margin of customer B? (Choose the closest amount.) Multiple Choice O All of the other answers are incorrect. O 0 $ 135,500 O $ 159,500 O $ 151.500
