QUESTION 12

1. Leber 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)	$	5.65	per DLH
   Processing batches	Number of batches	$	180.00	per batch
   Processing orders	Number of orders	$	68.55	per order
   Serving customers	Number of customers	$	2,423.00	per customer

   The cost of serving customers, $2,423.00 per customer, is the cost of serving a customer for one year. Solecki 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		900	units
   Number of batches		4	batches
   Number of orders		1	order
   Direct labor-hour requirement		0.20	DLHs per unit
   Selling price	$	30.00	per unit
   Direct materials cost	$	6.65	per unit
   Direct labor cost	$	3.85	per unit

   According to the ABC system, the total overhead cost for this customer this past year was closest to:

   	A.	$1,805.55
   	B.	$4,228.55
   	C.	$13,678.55
   	D.	$9,450.00