Orick 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, $2,574.00 per customer, is the cost of serving a customer for one year. Peiffer Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below:
Required:
a. According to the ABC system, what is the cost of the "Supporting assembly" activity for Peiffer Corporation for the year?
b. According to the ABC system, what is the cost of the "Processing batches" activity for Peiffer Corporation for the year?
c. According to the ABC system, what is the cost of the "Processing orders" activity for Peiffer Corporation for the year?
d. According to the ABC system, what is the cost of the "Servicing customers" activity for Peiffer Corporation for the year?
e. What is the customer margin on sales to Peiffer Corporation for the year?

Question

Orick 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, $2,574.00 per customer, is the cost of serving a customer for one year. Peiffer Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below:
  Required:
a. According to the ABC system, what is the cost of the "Supporting assembly" activity for Peiffer Corporation for the year?
b. According to the ABC system, what is the cost of the "Processing batches" activity for Peiffer Corporation for the year?
c. According to the ABC system, what is the cost of the "Processing orders" activity for Peiffer Corporation for the year?
d. According to the ABC system, what is the cost of the "Servicing customers" activity for Peiffer Corporation for the year?
e. What is the customer margin on sales to Peiffer Corporation for the year?

Quizplus · Accepted Answer

The Answer of Orick 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, $2,574.00 per customer, is the cost of serving a customer for one year. Peiffer Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below:
  Required:
a. According to the ABC system, what is the cost of the "Supporting assembly" activity for Peiffer Corporation for the year?
b. According to the ABC system, what is the cost of the "Processing batches" activity for Peiffer Corporation for the year?
c. According to the ABC system, what is the cost of the "Processing orders" activity for Peiffer Corporation for the year?
d. According to the ABC system, what is the cost of the "Servicing customers" activity for Peiffer Corporation for the year?
e. What is the customer margin on sales to Peiffer Corporation for the year?

Orick Enterprises Makes a Variety of Products That It Sells