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: Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) Total Expected Activity Customer A 300 15 20 Customer B 250 5 12 If the company earned $2,010 in revenue serving Customer A, then what is the customer margin for this customer? Multiple Choice О $320 $290 $220 О $390

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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:
Travel (number of miles driven)
Deliveries (number of deliveries)
Customer service (number of phone calls)
Total Expected Activity
Customer A Customer B
300
250
15
5
20
12
If the company earned $2,010 in revenue serving Customer A, then what is the customer margin for this
customer?
Multiple Choice
$320
$290
$220
$390
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 $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: Travel (number of miles driven) Deliveries (number of deliveries) Customer service (number of phone calls) Total Expected Activity Customer A Customer B 300 250 15 5 20 12 If the company earned $2,010 in revenue serving Customer A, then what is the customer margin for this customer? Multiple Choice $320 $290 $220 $390
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