$30,299
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Stupji Ltd uses activity based costing.
The budgeted distribution costs for the next year are:
Transport costs $2,631
Order processing $1,573
--------
Total distribution costs $4,204
It is estimated that in the next year, 325,000 orders will be processed, and that the delivery vehicles will travel 1,495,000 km.
A customer has indicated that 138 orders, each of which will require a journey of 122 km for each order will be placed next year.
To the nearest $, what is the distribution cost for this customer?
a. $47,342
b. $38,891
c. $30,299
d. $1,785
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