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:
A) $59.35
B) $1,704.15
C) $1,763.50
D) $189.35

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:
A) $59.35 
B) $1,704.15 
C) $1,763.50 
D) $189.35

Quizplus · Accepted Answer

The Answer of 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:
A) $59.35 
B) $1,704.15 
C) $1,763.50 
D) $189.35

Digerolamo Enterprises Makes a Variety of Products That It Sells