DelauderEnterprises makes a variety of products that it sells to other businesse

Question

DelauderEnterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: Activity Cost Pool Activity Measure Activity Rate Supporting assembly Processing batches Processing orders erving customers Direct labor-hours (DLHs)3.45 per DLH Number of batches Number of orders Number of customers $ 193.30 per batch $ 83.05 per order $1,608.00 per customer The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: Number of units purchased 1,500 units Number of batches Number of orders Direct labor-hour requirement Selling price Direct materials cost Direct labor cost 5 batches 2 orders 0.25 DLHs per unit $18.55 per unit $ 8.35 per unit $ 3.95 per unit According to the ABC system, the total cost of the activity "Processing batches" for this customer this past year was closest to

Explanation / Answer

Answer is $ 966.50 Explanation: Number of Bbacthes processed for customer 5 batches Activity cost for Processing batches 193.3 Activity cost for processing batches for customer 966.5 (5 batches @ 193.30 )

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