Question
Firm ZZZ repairs printers. Overhead costs have been broken down according to three activities. The activity service call handling has a cost driver rate (allocation
Firm ZZZ repairs printers. Overhead costs have been broken down according to three activities. The activity service call handling has a cost driver rate (allocation rate) $100 per service call; a Parts ordering activity has a cost driver rate of $50 per Web-based parts order, and a Billing and collection activity of $20 per bill (or reminder). One customer required 10 service calls, 5 web-based parts orders and had 3 bills (or reminders). Revenues for this one customer was $4,000 and the direct costs associated with this customer is $800. What is the customer-level operating income for this customer?
$1,830 | ||
$3,030 | ||
$1,890 | ||
$1,090 |
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