A company estimates that ordering costs are $4.00 per order, picking costs are $3.00 per unique item ordered, packing costs are $0.04 per item, and return costs are $70.00 per return.A customer makes 50 orders, orders 80 unique items, and 900 total items.The customer makes 11 returns.The pricing structure is to charge customers for the cost of the services that are provided.Using activity-based pricing for each of the above items, what will be the total amount of additional cost paid by the customer?
A)$1,246
B)$77.04
C)$1,540
D)$476

Question

Quizplus · Accepted Answer

Ordering costs: 50 orders x $4.00 per order = $200.00Picking costs: 80 unique items x $3.00 per unique item = $240.00Packing costs: 900 total items x $0.04 per item = $36.00Return costs: 11 returns x $70.00 per return = $770.00Total additional cost: $200.00 + $240.00 + $36.00 + $770.00 = $1,246.00

A Company Estimates That Ordering Costs Are $4