Managerial Accounting Chapter #17 - Activity Based Costing Problem #1 Kingston Inc. is a reseller of office equipment. They sell equipment to several companies in South Florida with a mark-up percentage of 10% of their cost of goods sold. They have provided the following estimated selling and administrative overhead information for the year: Activity Cost Pool Total Cost Total Activity Customer deliveries $ 336,000 4,000 deliveries Phone order processing 462,000 8,000 orders Online order processing 255,000 15,000 orders Other common fixed costs 800,000 Total selling and administrative expenses $ 1,853,000 The sales manager is analyzing profitability of one of its customers and has gathered the following information: Activity Measure Customer 104 Number of deliveries 10 Number of phone orders 4 Number of online orders 17 The cost of goods for this customer was $21,000. Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to this customer. 3. Compute the total revenue received from this customer. 4. Compute the customer margin (profit)