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Carlton Products Company has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results appear below: Cost Pool
Carlton Products Company has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results appear below: Cost Pool Annual Cost Cost Driver Annual Driver Quantity Processing electronic orders $1,000,000 Number of orders 500,000 Processing non-electronic orders $2,000,000 Number of orders 400,000 Picking orders $3,000,000 Number of different products ordered 800,000 Packaging orders $1,500,000 Number of items ordered 50,000,000 Returns $2,000,000 Number of returns 50,000 If all costs were assigned to customers based on the number of items ordered, what would be the cost per item ordered
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