Question: Alrex company is using an activity based costing (ABC) system. The company produces and sells two products. Basic and Pro. The company consists of two

 Alrex company is using an activity based costing (ABC) system. The

Alrex company is using an activity based costing (ABC) system. The company produces and sells two products. Basic and Pro. The company consists of two departments Production (where all manufacturing activities are taken and Marketing (which engages in selling and admin activity only). The ABC system includes in unit product costs all costs easily associated with units. In addition, in the ABC system, there are four major indirect activities: Machine Setups. Special Processing. Factory Supervision and Customer Relation The prices, direct material cost (OM), shipping cost and direct labor hours (DLHS) are given below for one unit of the product, as well as the total units produced and sold Product Basic Pro Price DM DLHS $180 $50 1 $3205802 Hourly Wage-DL $ 10 $12 Shipping Cost $2 4 $ Units 6.000 ,000 4 The company collected the data for ABC as follows: Activity Cost Pool Activity Measure Estimated OH COSI Machine Setup Special Processing Factory Supervision Customer Relation (10 customers) Activity measures used Basic Pro 60 120 6,000 10.000 of setups Machine hours DLH of customers $ $ $ $ 472.500 360,000 224.000 240,000 The company has two major customers (A and B), who buy their products in the amounts in the table below Customer Basic 800 27000 TO00 units units PIO 1200 How much is the ABC customer margin of customer B? (Choose the closest amount) Multiple Choice

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