Question
Pharmacy Company has two customers CVX and Ma & Pa with data as follows: CVX Ma & Pa Selling price per unit $40.00 $40.00 Units
Pharmacy Company has two customers CVX and Ma & Pa with data as follows:
| CVX | Ma & Pa |
Selling price per unit | $40.00 | $40.00 |
Units Sold | 4,500 | 3,800 |
Manufacturing Cost per unit |
$14.00 |
$14.00 |
Number of Purchase Orders |
25 |
155 |
Number of Deliveries | 107 | 183 |
Number of Expedited deliveries |
189 |
250 |
Customer Visits | 44 | 85 |
Pharmacy Companys management accountant gathered the following ABC rate information:
| ABC Cost Rate |
Purchase Orders | $216 per purchase order |
Deliveries | $112 per delivery |
Expedited Deliveries | $131 per expedited delivery |
Customer Visits | $ 62 per customer visit |
Using the information in the tables above and allocating indirect support costs using ABC to customers, what is the Operating Income for the CVX customer?
Multiple Choice
-
$ 59,400
-
$ 72,129
-
$ 117,000
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