I need help with a business and finance assignment

Nov 27th, 2015
Business & Finance
Price: $5 USD

Question description

Carlton Products Company has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results appear below:

Cost Pool                                          Annual Cost             Cost Driver                        Annual Driver Quantity

Processing electronic orders            $1,000,000       Number of orders                                          500,000

Processing non-electronic orders    $2,000,000         Number of orders                                       400,000

Picking orders                                 $3,000,000          Number of different products ordered         800,000 

Packaging orders                             $1,500,000         Number of items ordered                            50,000,000

Returns                                            $2,000,000         Number of returns                                       50,000

  If all costs were assigned to customers based on the number of items ordered, what would be the cost per item ordered?

Tutor Answer

(Top Tutor) Daniel C.
School: Rice University

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Nov 27th, 2015
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