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DelauderEnterprises 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
DelauderEnterprises 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. 14 Activity Cost Tool Activity Rate Activity Measure Direct labor-hours (DLHS) Number of batches Number of orders Number of customers Supporting assembly Processing batches Processing orders Serving customers Skipped $ 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. Number of units purchased Number of batches Number of orders Direct labor-hour requirement Selling price Direct materials gost Direct labor cost 1,500 units 5 batches 2 Orders DLHS per 0.25 unit $18.55 per unit $ 8.35 per unit $3.95 per unit According to the ABC system, the total cost of the activity "Processing batches for this customer this past year was closest to Multiple Choice O $1049.55 O $83.05 O $193.30 O $966.50
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