Question: Craftsman Inc. manufactures high-quality metal instruments using an activity-based costing system with five activity cost pools. The Other activity cost pool is used for all

Craftsman Inc. manufactures high-quality metal instruments using an activity-based costing system with five activity cost pools. The Other activity cost pool is used for all organization-sustaining costs.

Information on these activity cost pools are as follows:

Activity cost pool

Total cost

Activity measure

Total activity

Machining

$100,000

Direct Machine hours

10, 000 machine hours

Receiving orders

$20,000

# of orders

500 orders

Designing

$50,000

Designing hours

1,000 designing hours

Customer relation

$30,000

# of customers

50 customers

Other

$80,000

Not applicable

Not applicable

In 2021, a customer made 15 orders that consumed 1,000 machine hours and 20 designing hours. The revenue for these 15 orders is $30,000, and the customer margin for this customer is $10,000. What is the total direct cost for this customer? (please provide step-by step answer; otherwise, no point will be awarded).

Craftsman Inc. manufactures high-quality metal instruments using an activity-based costing system with

Craftsman Inc. manufactures high-quality metal instruments using an activity-based costing system with five activity cost pools. The "Other" activity cost pool is used for all organizationsustaining costs. Information on these activity cost pools are as follows: In 2021, a customer made 15 orders that consumed 1,000 machine hours and 20 designing hours. The revenue for these 15 orders is $30,000, and the customer margin for this customer is $10,000. What is the total direct cost for this customer? (please provide step-by step answer; otherwise, no point will be awarded)

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