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Assume a company's activity-based costing system includes three activities with the following activity rates Activity Cost Pool Travel Deliveries Customer service Activity Rate $2 per mile driven $ 50 per delivery $ 22 per phone call Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: 4 Total Expected Activity Customer A Customer B 300 15 20 Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) If the company earned $1,170 in revenue serving Customer B, then what is the customer margin for this customer? 250 5 12

Assume a company's activity-based costing system includes three activities with the following activity rates Activity Cost Pool Travel Deliveries Customer service Activity Rate $2 per mile driven $ 50 per delivery $ 22 per phone call Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: 4 Total Expected Activity Customer A Customer B 300 15 20 Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) If the company earned $1,170 in revenue serving Customer B, then what is the customer margin for this customer? 250 5 12

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume a company's activity-based costing system includes three activities with the following activity rates Activity Cost Pool Travel Deliveries Customer service. Activity Rate $2 per mile driven. $ se per delivery $ 22 per phone call Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: 4 Total Expected Activity Customer A Customer B 300 15 20 Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) If the company earned $1,170 in revenue serving Customer B, then what is the customer margin for this customer? 250 5 12
Transcribed Image Text:Assume a company's activity-based costing system includes three activities with the following activity rates Activity Cost Pool Travel Deliveries Customer service. Activity Rate $2 per mile driven. $ se per delivery $ 22 per phone call Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: 4 Total Expected Activity Customer A Customer B 300 15 20 Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) If the company earned $1,170 in revenue serving Customer B, then what is the customer margin for this customer? 250 5 12
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