Using activity based methods-what is profit from customer

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Reference no: EM131285180

One customer orders $20,000,000 worth of product each year by making 50 electronic orders. The direct cost of these orders is $16,000,000. The customer orders an average of 20 separate items on each order (1,000 items for the year) and has ordered a total of 5,000,000 items during the year, and returns nothing. Using activity based methods, what is the profit from this customer?

A. $4,000,000

B. $3,846,900

C. $2,950,000

D. $0

Reference no: EM131285180

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