Beta Company is preparing its annual profit plan. As part of its analysis of the

Question

Beta Company is preparing its annual profit plan. As part of its analysis of the profitability of its customers management estmates that the $10,800 for sales support should be assigned to the individual customers from the information given as follows Customer A Customer B 200,000 Units Purchased Purchase order (annual) 100,000 12 What is the amount of the sales support costs that should be allocated to Customer A assuming Beta uses units purchased to compute activity-based costs? O $900 O $9.900 O $7.200 O $3.600 ORD: Study341

Explanation / Answer

answer

$ 3600

total units purchased = 100000 + 200000

= 300000

total cost = 10800

unit rate to allocated cost = 10800 / 300000

= 0.036

cost allocated to customer A = 100000 * 0.036

= 3600

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