I need help with a business and finance assignment

Nov 27th, 2015
Anonymous
Category:
Accounting
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?

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