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Mustafa Enterprises 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
Mustafa Enterprises 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: Activity Cost Pool Activity Measure Activity Rate Supporting assembly Direct labor-hours (DLHs) 7.50per DLH Processing batches Number of batches 111 65per batch Processing orders Number of orders 86 00per order Serving customers Number of customers 2,737 00per customer The cost of serving customers, $2,737.00 per customer, is the cost of serving a customer for one year. Dahle 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 800units Number of batches 16batches Number of orders 4order Direct labor-hour requirement 0.40DLHs per unit Selling price 24.25per unit Direct materials cost 7.45per unit Direct labor cost 7.85per unit According to the ABC system, the total cost of the activity "Supporting assembly" for this customer this past year was closest to: $320.00 O 56,000.00 O $3.00 52 400.00
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