This year, Lambert Company will ship 1,500,000 pounds of goods to customers ata cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 ofrevenue (total revenue is $20 million), the amount of shipping cost assigned to thecustomer by using ABC would bea. unable to be determined.b. $8,000 ($0.80 per pound shipped).c. $24,000 (2% of the shipping cost).d. $12,000 (1% of the shipping cost).e. None of these.
This year, Lambert Company will ship 1,500,000 pounds of goods to customers ata cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 ofrevenue (total revenue is $20 million), the amount of shipping cost assigned to thecustomer by using ABC would bea. unable to be determined.b. $8,000 ($0.80 per pound shipped).c. $24,000 (2% of the shipping cost).d. $12,000 (1% of the shipping cost).e. None of these.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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This year, Lambert Company will ship 1,500,000 pounds of goods to customers at
a cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 of
revenue (total revenue is $20 million), the amount of shipping cost assigned to the
customer by using ABC would be
a. unable to be determined.
b. $8,000 ($0.80 per pound shipped).
c. $24,000 (2% of the shipping cost).
d. $12,000 (1% of the shipping cost).
e. None of these.
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