Scholfield Enterprises makes a variety of products that it sells to other businesses. The companys activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that activity-based costing system are listed below:

Activity Cost Pool	Activity Measure	Activity Rate
Supporting assembly	Direct labor-hours (DLHs)	$ 6.55	per DLH
Processing batches	Number of batches	$ 138.20	per batch
Processing orders	Number of orders	$ 52.60	per order
Serving customers	Number of customers	$ 1,191.00	per customer

The cost of serving customers, $1,191.00 per customer, is the cost of serving a customer for one year.

Latif Corporation buys only one of the companys products which Scholfield Enterprises sells for $15.60 per unit. Last year Latif Corporation ordered a total of 1,100 units of this product in 2 orders. To fill the orders, 7 batches were required. The direct materials cost is $7.85 per unit and the direct labor cost is $1.90 per unit. Each unit requires 0.10 direct labor-hours.

According to the activity-based costing system, the customer margin for this customer this past year was closest to:

Multiple Choice

$14,175.90

$6,435.00

$3,450.90

$8,525.00

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