Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 $2,090 in revenue serving Customer A, then what is the customer margin for this customer?
Multiple Choice
-
$470
-
$400
-
$300
-
$370
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started