Question
DelauderEnterprises makes a variety of products that it sells to other businesses. The companys 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 companys 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 Activity Measure Activity Rate Supporting assembly Direct labor-hours (DLHs) $ 3.45 per DLH Processing batches Number of batches $ 193.30 per batch Processing orders Number of orders $ 83.05 per order Serving customers Number of customers $ 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 companys products. The details of last years purchases of this product are listed below: Number of units purchased 1,500 units Number of batches 5 batches Number of orders 2 orders Direct labor-hour requirement 0.25 DLHs per unit Selling price $ 18.55 per unit Direct materials cost $ 8.35 per unit Direct labor cost $ 3.95 per unit According to the ABC system, the total overhead cost for this customer this past year was closest to:
$4,034.35
$22,484.35
$2,426.35
$18,450.00
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