A Custom Yacht-Building Company Uses Activity-Based Pricing The Pricing Structure Is to Charge Customers for the Cost

question 94

Multiple Choice

A custom yacht-building company uses activity-based pricing. The company's annual activity pools and related information follow: $\begin{array}{lclr}\text { Cost Pool}& \text { Estimated Cost }& \text { CostDriver } & \text { Driver Ouantit }\\\hline\text { Design } & \$ 2,500,000 & \text { Number of designs } & 80 \text { designs } \\\text { Production } & 4,000,000 & \text { Labor hours } & 125,000 \text { labor hours } \\\text { Customer service } & 80,000 & \text { Number of customers } & 20 \text { customers }\end{array}$ The pricing structure is to charge customers for the cost of the services that are provided. One particular customer requested 2 different designs which led to the production of one yacht which took 2,400 labor hours to complete. What additional costs will be charged to this customer?

• A) $143,300
• B) $112,050
• C) $139,300
• D) $108,050

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