Yellow Industries decides to price delivery service according to the results of a recent activity-based costing (ABC) study. The study indicates Yellow sh charge $8 per order, 2% of the order's value for general delivery costs, $1.25 per item, and $30 for delivery. O A year later, Yellow collected the following information for two of its best customers. Cost Driver Number of orders Number of deliveries Number of items Order value Customer C Customer D $5.344 18 10 2,000 $120,000 8 10 4,000 $ 80,000 What are the total delivery costs charged to Customer D during the year?
Yellow Industries decides to price delivery service according to the results of a recent activity-based costing (ABC) study. The study indicates Yellow sh charge $8 per order, 2% of the order's value for general delivery costs, $1.25 per item, and $30 for delivery. O A year later, Yellow collected the following information for two of its best customers. Cost Driver Number of orders Number of deliveries Number of items Order value Customer C Customer D $5.344 18 10 2,000 $120,000 8 10 4,000 $ 80,000 What are the total delivery costs charged to Customer D during the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
2.
Transcribed Image Text:QUESTION 1
Yellow Industries decides to price delivery service according to the results of a recent activity-based costing (ABC) study. The study indicates Yellow shoul
charge $8 per order, 2% of the order's value for general delivery costs, $1.25 per item, and $30 for delivery.
A year later, Yellow collected the following information for two of its best customers:
Cost Driver
Number of orders
Number of deliveries
Number of items
Order value
$5,344
$5,364
Customer C
$6,900
O $6,964
18
10
2,000
$120,000
Customer D
What are the total delivery costs charged to Customer D during the year?
8
4,000
$ 80,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education