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Republic Industries decides to price delivery services according to the results of a recent activity-based costing (ABC) study. The study indicates Republic should charge $8
Republic Industries decides to price delivery services according to the results of a recent activity-based costing (ABC) study. The study indicates Republic should charge $8 per order, 2% of annual order value for general delivery costs, $1.25 per item, and $30 for delivery.
A year later, Republic collected the following information for two of its best customers:
Cost driver | Customer C | Customer D | |||||
Number of orders | 18 | 8 | |||||
Number of deliveries | 10 | 10 | |||||
Total number of items | 2,000 | 4,000 | |||||
Annual order value | $ | 120,000 | $ | 80,000 | |||
What are the total delivery costs charged to Customer D during the year?
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