Question: Assume a company's activity-based costing system includes three activities with the following activity rates: Activity Cost Pool Activity Rate Travel $ 2 per mile driven

Assume a company's activity-based costing system includes three activities with the following activity rates:

Activity Cost Pool Activity Rate
Travel $ 2 per mile driven
Deliveries $ 70 per delivery
Customer service $ 22 per phone call

Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows:

Total Expected Activity
Customer A Customer B
Travel (number of miles driven) 300 250
Deliveries (number of deliveries) 15 10
Customer service (number of phone calls) 20 12

How much cost would be assigned from the Deliveries activity to Customer B?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!