First Décor Has Analyzed the Indirect Costs Associated with Servicing

question 115

Multiple Choice

First Décor has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results for the year appear below:
$\begin{array}{lrlr}\hline \text { Cost Pool } & \text { Cost } & \text { Cost Driver } & \text { Quantity } \\\hline \text { Processing electronic orders } & \$ 400,000 & \text { Number of orders } & 40,000 \\\text { Processing non-electronic orders } & 120,000 & \text { Number of orders } & 8,000 \\\text { Picking orders } & 240,000 & \text { Number of different products ordered } & 120,000 \\\text { Packaging orders } & 180,000 & \text { Number of items ordered } & 150,000 \\\text { Returns } & 15,000 & \text { Number of returns } & 3,000\end{array}$
What is the cost allocation for two Internet orders for 22 items with 7 different products and one return?

• A) $65.40
• B) $33.20
• C) $60.40
• D) $40.40

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Definitions:

Embryonic Development

The process by which the embryo forms and develops, starting from a single cell and leading to a complex, multi-cellular organism.

Archenteron

The primitive gut formed during early embryonic development in animals, from which the digestive tract eventually develops.

Organogenesis

A process in developmental biology where organs form from the precursor tissues during embryonic development.

Embryonic Development

The series of changes an embryo undergoes in the process of growth and differentiation to become a functional organism.