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Delauder Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning
Delauder Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: Activity Cost Pool Supporting assembly Processing batches Processing orders Serving customers Activity Measure Direct labor-hours (DLHS) Number of batches Number of orders Number of customers Activity Rate $ 3.45 per DLH $ 193.30 per batch $ 83.05 per order $1,608.00 per customer The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: 1,500 units 5 batches 2 orders Number of units purchased Number of batches Number of orders Direct labor-hour requirement Selling price Direct materials cost Direct labor cost 0.25 DLHS per unit $18.55 per unit $ 8.35 per unit $ 3.95 per unit According to the ABC system, the total overhead cost for this customer this past year was closest to: Multiple Choice O $22.484.35 O $4,034.35 O $18.450.00 O $2.426.35
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