Question : 122.A company estimates that ordering costs $4.00 per order, picking : 1302815

 

 

122.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

 

123.A company using activity-based pricing marks up the direct cost of goods by 30% and then adds the cost of the services that are provided. Indirect costs are charged as follows: $8.00 per order placed; $4.00 per separate item ordered; $30.00 per return. A customer places 10 orders with a total direct cost of $3,000, orders 300 separate items, and makes 5 returns. What will the customer be charged?

A.$3,000

B.$3,900

C.$5,330

D.$5,759

 

124.Marquez Enterprises uses activity-based pricing and marks up the direct cost of goods by 40%. In addition, the customer is charged for indirect costs based on the activities utilized. Indirect costs are as follows: $7 per order placed and $11 per return. A customer places 12 orders with a direct cost of $6,100 and makes 2 returns. How much in indirect costs will the customer be charged?

A.$18

B.$106

C.$6,206

D.$2,440

 

125.A custom yacht-building company uses activity-based pricing. The company’s annual activity pools and related information follow:

 

Cost PoolEstimated CostCost Driver   Driver Quantity

Design              $2,500,000              Number of designs80 designs

Production              4,000,000              Labor hours125,000 labor hours

Customer service              80,000              Number of customers20 customers

 

The pricing structure is to charge customers for the cost of the services that are provided. One particular customer requested 2 different designs which led to the production of one yacht which took 2,400 labor hours to complete. What additional costs will be charged to this customer?

A.$143,300

B.$112,050

C.$139,300

D.$108,050

 

126.A law firm uses activity-based pricing. The company’s annual activity pools and related information are as follows:

 

Cost PoolEstimated CostCost DriverDriver Quantity

Consultation              $125,000              Number of consultations200 consultations

Administrative costs              66,000              Admin labor hours6,000 labor hours

Client service              34,000              Number of clients400 clients

 

The pricing structure is to charge customers for the cost of the services that are provided. The firm had four consultations with Doris Lansing and required 88 administrative labor hours. What additional costs will be charged to this customer?

A.$636

B.$721

C.$3,468

D.$3,553

127. A law firm uses activity-based pricing. The company’s annual activity pools and related information are as follows:

 

Cost PoolEstimated CostCost DriverDriver Quantity

Consultation              $125,000              Number of consultations200 consultations

Administrative costs              66,000              Admin labor hours6,000 labor hours

Client service              34,000              Number of clients400 clients

 

The pricing structure is to charge customers for the cost of the services that are provided. The firm had two consultations with Randall’s Auto Shop and required 64 administrative labor hours. What additional costs will be charged to this customer?

A.$1,954

B.$2,039

C.$721

D.$1,442

 

128. Veterinarians Johns & Doggins have analyzed their customer data for the past year and have determined the following costs:

 

Customer inquiries cost each              $     12

Additional costs if inquiry is after hours               20

Dispensing of prescriptions              18

Relationship management costs (Per customer per year)              800

 

In addition to these costs, product costs amount to 75% of sales. In the prior year, Johns & Doggins had the following experience with one of its customers, Millie Woods:

 

Sales              $3,100

Total number of inquiries              50

Percent of after-hours inquiries              80%

Prescriptions dispensed              26

 

For the coming year, Johns & Doggins have told Woods that she will be switched to an activity-based pricing system or will be dropped as a customer. In addition to regular prices, Woods will be required to pay:

 

Inquiries               $18 each

After hours inquiries              $21 each

Prescription dispensing               $22 each

 

How much is the additional revenue to be charged to Woods account if activity is the same as in the prior year?

A.$2,312

B.$2,392

C.$3,112

D.$3,952