90.2K

Verified Solution

Link Copied!

Colby Company makes cases for cell phones of all sizes and types for sale through specialty retailers. The company makes a standard model for the most recent iPhone as well as a deluxe model Management has designed an ABC wystem with the following activity cost pools and activity rates for these models: Activity Cost Pool Activity Rates Supporting manufacturing Order processing $ 2 per direct labour-hour $ 21 per order Customer service $75 per customer Management would like an analysis of the profitability of a particular customer Cell City, which has ordered the following products over the last 12 months Standard Model Deluxe Model Number of cases 100 Number of orders 3 Direct labour boun perco 0.25 040 Selling price pe care $40 Direct materials cost per S12 513 The company direct labow rate is $24 per hour. Record your answers to the nearest dollar. (assume customer service is split evenly across both models) 1) Use Activity Based Costing to calculate the customer profitability for the Standard Model 2) Use Activity Based Costing to calculate the customer profitability for the Deluxe Model 1) Use Activity Based Costing to calculate the customer profitability for the Standard Model Answer: 2) Use Activity Based Costing to calculate the customer profitability for the Deluxe Model

Answer & Explanation Solved by verified expert

See Answer