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Assume a company's activity-based costing system includes three activities with the following activity rates: Travel $2 per mile driven Deliveries $50 per delivery Customer service $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: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) 15 5 12 Customer service (number of phone calls) 20 If the company earned $1,230 in revenue serving Customer B, then what is the customer margin for this customer? A) $256 B) $216 C) $196 D) $236

Assume a company's activity-based costing system includes three activities with the following activity rates: Travel $2 per mile driven Deliveries $50 per delivery Customer service $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: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) 15 5 12 Customer service (number of phone calls) 20 If the company earned $1,230 in revenue serving Customer B, then what is the customer margin for this customer? A) $256 B) $216 C) $196 D) $236

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: Travel $2 per mile driven Deliveries $50 per delivery Customer service $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: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) 15 5 12 Customer service (number of phone calls) 20 If the company earned $1,230 in revenue serving Customer B, then what is the customer margin for this customer? A) $256 B) $216 C) $196 D) $236
Transcribed Image Text:Assume a company's activity-based costing system includes three activities with the following activity rates: Travel $2 per mile driven Deliveries $50 per delivery Customer service $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: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) 15 5 12 Customer service (number of phone calls) 20 If the company earned $1,230 in revenue serving Customer B, then what is the customer margin for this customer? A) $256 B) $216 C) $196 D) $236
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