Reference no: EM133008139

Question - Fence Industries is preparing its annual profit plan. As part of its analysis of the profitability of its customers, management estimates that the $14,000 for sales support should be assigned to the individual customers from the information given as follows:

Customer A Customer B

Units purchased 100,000 200,000

Purchase orders (annual) 10 25

What is the amount of the sales support costs that should be allocated to Customer B, assuming Fence uses purchases orders to compute activity-based costs?

a. $10,000.

b. $8,900.

c. $4,000.

d. $8,500.

e. $10,600.