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Assume a companys activity-based costing system included three expenses: Vehicle operating expenses, $300,000; Vehicle depreciation, $160,000; and Customer service salaries, $210,000. These costs were consumed

Assume a companys activity-based costing system included three expenses: Vehicle operating expenses, $300,000; Vehicle depreciation, $160,000; and Customer service salaries, $210,000. These costs were consumed by four activities as follows: Travel Deliveries Customer Service Other Total Vehicle operating expenses 45% 40% 10% 5% 100% Vehicle depreciation 40% 50% 0% 10% 100% Customer service salaries 20% 30% 35% 15% 100% How much of the companys total costs should not be allocated to customers when analyzing customer profitability? Multiple Choice $87,500 $42,000 $62,000 $62,500

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pt 2

Assume the following information for a company that produced and sold 10,000 units during its first year of operations:

Per Unit Per Year
Selling price $ 200
Direct materials $ 67
Direct labor $ 50
Variable manufacturing overhead $ 10
Fixed manufacturing overhead $ 300,000

Using variable costing, what is the companys unit product cost?

Multiple Choice

  • $127

  • $147

  • $117

  • $157

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