The cost of serving customers, $1,191.00 per customer, is the cost of serving a customer for one year.
The direct labor cost is $1.90 per unit. Each unit requires 0.10 direct labor-hours.
According to the activity-based costing system, the total overhead cost for this customer this past year was closest to:
Multiple Choice
$2,984.10
$1,793.10
$10,725.00
$13,709.10
Scholfield 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 activity-based costing system are listed below:
Activity Cost Pool Supporting assembly Processing batches Processing orders Serving customers
Activity Measure
Activity Rate $138.20 per batch $2.60 per order $1,191.00 per customer
Direct labor-hours (DLHs) Number of batches Number of orders Number of customers
The cost of serving customers, $1,191.00 per customer, is the cost of serving a customer for one year. Latf Corporation buys only one of the company's products which Scholfield Enterprises sells for $15.60 per unit. Last year Latf Corporation ordered a total of 1,000 units of this product in 2 orders. To fill the orders, 7 batches were required. The direct materials cost is $7.85 per unit and the direct labor cost is $1.90 per unit. Each unit requires 0.10 direct labor-hours.