Express Travel Decides to Price Delivery Service According to the Results

question 71

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 C during the year?

• A) $16,863.
• B) $20,000.
• C) $31,272.
• D) $32,272.

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Definitions:

Self-determination Theory

A psychological theory focused on motivation that suggests people are most motivated to grow and change when their needs for autonomy, competence, and relatedness are fulfilled.

Intrinsic Motivation

The drive to engage in an activity for its own sake, due to the personal satisfaction and fulfillment it provides, without external incentives.

Extrinsic Motivation

Refers to motivation driven by external rewards such as money, fame, grades, and praise.

Intrinsic Motivation

The drive to engage in activities for their own sake, for the pleasure and satisfaction derived from participation, rather than for some separable consequence.