Question
XYZ Company use ABC costing information for Customer Profitability Analysis. It has prepared the following activity based drivers and related costs for customers: Customer-Related Activities
XYZ Company use ABC costing information for Customer Profitability Analysis. It has prepared the following activity based drivers and related costs for customers:
Customer-Related Activities Cost Driver Base Cost Drive Rate
Order processing Purchase orders $150
Sales contacts Contacts $100
(phone calls, faxes, etc.)
Sales visits Visits $1,000
Billing and collection Invoices $160
In looking at two of its customers, it has calculated the following support activities for Jones Company:
Jones Company
Purchase orders 4
Contacts 4
Visits 0
Invoices 4
how much is the Support Activity cost for MIller Company?
A.$1,345
B.$2,000
C.$5,580
D.$4,800
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