QUESTION
Assume a companys activity-based costing system includes three activities with the following activity rates:
Activity Cost Pool
Activity Rate
Travel
$
2
per mile driven
Deliveries
50
per delivery
Customer service
22
per phone call
Two of the companys many customers include Customer A and Customer B. These two customers consumed the companys activities as follows:
Total Expected Activity
Customer A
Customer B
Travel (number of miles driven)
300
250
Deliveries (number of deliveries)
15
5
Customer service (number of phone calls)
20
12
How much total activity cost would be assigned to Customer B from the companys three activities?
$974
$1,244
$1,114
$1,014
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