Q1) Calumet Inc is investigating its phone ordering costs and hoping to trace those costs to each of its three customer types, individuals, book stores and internet sales. Calumet uses in-house phone service for regular hours problems and orders and an outside source for weekend evening phone service.

Individual Internet

Calumet Inc Phone Information Total Customers Book Stores Sales
Phone Hours 60,000 30,000 18,000 12,000
In house phone time 40% 80% 10%
Outside phone time 60% 20% 90%
In-house phone time $276,000
Outside phone service costs $583,000
Total phone service costs $859,000

Calumet's phone costs (rounded) for Individual Customers are:

a. $144,000
b. $208,800
c. $206,400
d. $444,000