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Yellow Industries decides to price delivery service according to the results of a recent activity-based costing (ABC) study. The study indicates Yellow should charge $15
Yellow Industries decides to price delivery service according to the results of a recent activity-based costing (ABC) study. The study indicates Yellow should charge $15 per order, 8% of the order's value for general delivery costs, $7.00 per item, and $37 for delivery. A year later, Yellow collected the following information for two of its best customers:
Cost driver | Customer C | Customer D |
Number of order | 25 | 15 |
Number of deliveries | 17 | 17 |
Number of items | 2,500 | 4,500 |
Order value | $170,000 | $130,000 |
What are the total delivery costs charged to Customer D during the year? |
$42,529.
$42,125.
$42,754.
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