Digerolamo 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, $1,159.00 per customer, is the cost of serving a customer for one year.
Carlacci Corporation buys only one of the company's products which Digerolamo Enterprises sells for $18.85 per unit. Last year Carlacci Corporation ordered a total of 1,500 units of this product in 4 orders. To fill the orders, 9 batches were required. The direct materials cost is $8.15 per unit and the direct labor cost is $2.60 per unit. Each unit requires 0.15 DLHs.
According to the ABC system, the total cost of the activity "Processing batches" for this customer this past year was closest to:

Question

Digerolamo 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, $1,159.00 per customer, is the cost of serving a customer for one year.
Carlacci Corporation buys only one of the company's products which Digerolamo Enterprises sells for $18.85 per unit. Last year Carlacci Corporation ordered a total of 1,500 units of this product in 4 orders. To fill the orders, 9 batches were required. The direct materials cost is $8.15 per unit and the direct labor cost is $2.60 per unit. Each unit requires 0.15 DLHs.
According to the ABC system, the total cost of the activity "Processing batches" for this customer this past year was closest to:

Quizplus · Accepted Answer

Cost of processing batches = $189.35 per batch × 9 batches = $1,704.15

Digerolamo Enterprises Makes a Variety of Products That It Sells