Cumberland Enterprises Makes a Variety of Products That It Sells

question 49

Multiple Choice

Cumberland Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below: The cost of serving customers, $2,663.00 per customer, is the cost of serving a customer for one year.Steckman Corporation buys only one of the company's products which Cumberland Enterprises sells for $22.05 per unit. Last year Steckman Corporation ordered a total of 1,200 units of this product in 4 orders. To fill the orders, 8 batches were required. The direct materials cost is $7.65 per unit and the direct labor cost is $5.20 per unit. Each unit requires 0.30 DLHs.According to the ABC system, the customer margin for this customer this past year was closest to:

• A) $20,269.60
• B) $4,849.60
• C) $17,280.00
• D) $11,040.00

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Definitions:

MRP Curves

Marginal Revenue Product curves, which depict the additional revenue generated by employing one more unit of a resource, such as labor or capital.

Manufacturing Jobs

Positions in the workforce that involve working in factories, plants, or anywhere goods are produced in large quantities.

Productivity Growth

An increase in the efficiency of production, often measured as the output per unit of input over time.

Service Sector Jobs

These are employment opportunities in the service industry, focusing on providing services rather than goods, such as retail, education, and healthcare.