Question
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) | 300 | 250 |
| Deliveries (number of deliveries) | 15 | 5 |
| Customer service (number of phone calls) | 20 | 12 |
If the company earned $1,230 in revenue serving Customer B, then what is the customer margin for this customer?
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
15th edition
1259404781, 007802563X, 978-1259404788, 9780078025631, 978-0077522940
