Carlton products company has analyzed the indirect costs, Ask an Expert

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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?

a) $0.19

b) $10.62

c) $0.09

d) $6.09

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9793160

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