A custom yacht-building company uses activity-based pricing. The company’s annual activity pools and related information follow: Cost Pool Estimated Cost Cost Driver Driver Quantity Design $2,500,000 Number of designs 80 designs Production 4,000,000 Labor hours 125,000 labor hours Customer service 80,000 Number of customers 20 customers The pricing structure is to charge customers for the cost of the services that are provided. One particular customer requested 2 different designs which led to the production of one yacht which took 2,400 labor hours to complete. What additional costs will be charged to this customer? I had 143,300 as the final answer but want to double check. Thank you.
A custom yacht-building company uses activity-based pricing. The company’s annual activity pools and related information follow:
Cost Pool Estimated Cost Cost Driver Driver Quantity
Design $2,500,000 Number of designs 80 designs
Production 4,000,000 Labor hours 125,000 labor hours
Customer service 80,000 Number of customers 20 customers
The pricing structure is to charge customers for the cost of the services that are provided. One particular customer requested 2 different designs which led to the production of one yacht which took 2,400 labor hours to complete. What additional costs will be charged to this customer?
I had 143,300 as the final answer but want to double check. Thank you.
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