Question
First Dcor has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results for the year appear below:
First Dcor has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results for the year appear below:
Cost Pool Cost Cost DriverQuantity
Processing electronic orders $400,000 Number of Orders 40,000
Processing non-electronic orders $120,000 Number of Orders 8,000
Picking orders $240,000 Number of different products Ordered120,000
Packaging orders $180,000 Number of items ordered 150,000
Returns $15,000 Number of returns 3,000
If all costs were assigned to customers based on the number of items ordered, what would be the cost per item ordered?
A $33.20
B $1.20
C $0.16
D $6.37
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started