Express Travel Decides to Price Delivery Service According to the Results

question 141

Multiple Choice

Express Travel decides to price delivery service according to the results of a recent activity-based costing (ABC) study.The study indicates Express Travel should charge $16 per order,1% of the order's value for general delivery costs,$2.50 per item,and $45 for delivery.A year later,Express Travel collected the following information for three of its customers:
$$\begin{array} { | l | r | r | r | } \hline \text { Cost driver } & \text { Customer } & \text { Customer } & \text { Customer } \\&\text { A } & \text { B } & \text { C }\\ \text { Number of orders } &18&8&12 \\\hline \text { Number of }& \\\text { deliveries }&10&10&24\\\hline \text { Number of items } & 2,000 & 4,000 & 12,000 \\\hline \text { Ordervalue } & \$ 120,000 & \$ 80,000 & \$ 100,000 \\\hline \end{array}$$
What are the total delivery costs charged to Customer B during the year?

• A) $13,490.
• B) $11,378.
• C) $10,800.
• D) $10,578.

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