Reference no: EM132553009
Scholfield Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that ABC system are listed below:
Activity Cost Pool Activity Measure Activity Rate Supporting assembly
Direct labor-hours (DLHs) $6.55 per DLH
Processing batches Number of batches $138.20 per batch
Processing orders Number of orders $52.60 per order
Serving customers Number of customers $1,191.00 per customer
The cost of serving customers, $1,191.00 per customer, is the cost of serving a customer for one year.
Latif Corporation buys only one of the company's products which Scholfield Enterprises sells for $15.60 per unit. Last year Latif Corporation ordered a total of 1,100 units of this product in 2 orders. To fill the orders, 7 batches were required. The direct materials cost is $7.85 per unit and the direct labor cost is $1.90 per unit. Each unit requires 0.10D LHs.
Question 1: According to the ABC system, the total overhead cost for this customer this past year was closest to: