Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger

Exercise 41

This year, Lambert Company will ship 1,500,000 pounds of goods to customers at a cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 of revenue (total revenue is $20 million), the amount of shipping cost assigned to the customer by using ABC would be
A) unable to be determined.
B) $8,000 ($0.80 per pound shipped).
C) $24,000 (2% of the shipping cost).
D) $12,000 (1% of the shipping cost).
E) None of these.