Pilkerton 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, $2,533.00 per customer, is the cost of serving a customer for one year.Christoforou Corporation buys only one of the company's products which Pilkerton Enterprises sells for $21.65 per unit. Last year Christoforou Corporation ordered a total of 1,300 units of this product in 3 orders. To fill the orders, 10 batches were required. The direct materials cost is $6.60 per unit and the direct labor cost is $2.75 per unit. Each unit requires 0.15 Direct labor-hours.According to the ABC system, the total overhead cost for this customer this past year was closest to:
A) $4,254.65
B) $1,721.65
C) $12,155.00
D) $16,409.65

Question

Pilkerton 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, $2,533.00 per customer, is the cost of serving a customer for one year.Christoforou Corporation buys only one of the company's products which Pilkerton Enterprises sells for $21.65 per unit. Last year Christoforou Corporation ordered a total of 1,300 units of this product in 3 orders. To fill the orders, 10 batches were required. The direct materials cost is $6.60 per unit and the direct labor cost is $2.75 per unit. Each unit requires 0.15 Direct labor-hours.According to the ABC system, the total overhead cost for this customer this past year was closest to:
A) $4,254.65 
B) $1,721.65 
C) $12,155.00 
D) $16,409.65

Quizplus · Accepted Answer

The Answer of Pilkerton 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, $2,533.00 per customer, is the cost of serving a customer for one year.Christoforou Corporation buys only one of the company's products which Pilkerton Enterprises sells for $21.65 per unit. Last year Christoforou Corporation ordered a total of 1,300 units of this product in 3 orders. To fill the orders, 10 batches were required. The direct materials cost is $6.60 per unit and the direct labor cost is $2.75 per unit. Each unit requires 0.15 Direct labor-hours.According to the ABC system, the total overhead cost for this customer this past year was closest to:
A) $4,254.65 
B) $1,721.65 
C) $12,155.00 
D) $16,409.65

Pilkerton Enterprises Makes a Variety of Products That It Sells