First Décor Has Analyzed the Indirect Costs Associated with Servicing

question 86

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: $\begin{array}{lrlr}\hline \text { Cost Pool } & \text { Cost } & \text { Cost Driver } & \text { Quantity } \\\hline \text { Processing electronic orders } & \$ 400,000 & \text { N umber of orders } & 40,000 \\\text { Processing non-electronic orders } & 120,000 & \text { N umber of orders } & 8,000 \\\text { Picking orders } & 240,000 & \text { N umber of different products ordered } & 120,000 \\\text { Packaging orders } & 180,000 & \text { N umber of items ordered } & 150,000 \\\text { Returns } & 15,000 & \text { Number of returns } & 3,000\end{array}$ 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

---

Definitions:

Goodwill Messages

Communications intended to foster positive relations and express friendship, appreciation, or moral support.

Offer Thanks

Expressing gratitude or appreciation to someone for their help, support, or gesture, often seen in both personal and professional communication.

Goodwill Messages

Communications that express thanks, congratulations, or other positive sentiments, intended to build good relationships and positive impressions.

Five S's

Refers to five Japanese terms beginning with 'S' used to create a workplace conducive to organizational and visual harmony: Seiri (sort), Seiton (set in order), Seiso (shine), Seiketsu (standardize), and Shitsuke (sustain).