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Assume a companys activity-based costing system includes three activities with the following activity rates: Activity Cost Pool Activity Rate Travel $ 2 per mile driven
Assume a companys activity-based costing system includes three activities with the following activity rates:
Activity Cost Pool | Activity Rate | |||
Travel | $ | 2 | per mile driven | |
Deliveries | $ | 50 | per delivery | |
Customer service | $ | 22 | per phone call | |
Two of the companys many customers include Customer A and Customer B. These two customers consumed the companys activities as follows:
Total Expected Activity | |||||||
Customer A | Customer B | ||||||
Travel (number of miles driven) | 340 | 250 | |||||
Deliveries (number of deliveries) | 15 | 5 | |||||
Customer service (number of phone calls) | 20 | 12 | |||||
How much cost would be assigned from the Travel activity to Customer A?
Multiple Choice
A $500
B $680
C $60
D $170
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