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 ActivitiesCost
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 ActivitiesCost Driver BaseCost Drive RateOrder processingPurchase orders$150Sales contacts (phone calls, faxes, etc.)Contacts$100Sales visitsVisits$1,000Billing and collectionInvoices$160
In looking at two of its customers, it has calculated the following support activities for Jones Company:
Jones CompanyPurchase orders4Contacts4Visits0Invoices4
Using ABC, what is the Total Support Cost for Jones Company?
A.$1,500
B.$1,640
C.$1,000
D.$5,987
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