Express Travel decides to price delivery services according to the results of a recent activity-based costing (ABC) study. The study indicates Express Travel should charge $16 per order, 1% of annual order value for general delivery costs, $2.50 per item, and $45 for delivery.A year later, Express Travel collected the following information for three of its customers:Cost driverCustomer A Customer B Customer CNumber of orders 18 8 12 Number of deliveries 10 10 24 Total number of items 2,000 4,000 12,000 Annual order value$120,000 $80,000 $100,000 What are the total delivery costs charged to Customer A during the year?
A. $20,235.
B. $5,738.
C. $6,938.
D. $6,650.
Answer: C
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