Larry 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 PoolActivity MeasureActivity RateSupporting assemblyDirect labor-hours (DLHs)$2.55per DLHProcessing batchesNumber of batches$138.35per batchProcessing ordersNumber of orders$77.00per orderServing customersNumber of customers$1,913.00per customer The cost of serving customers, $1,913.00 per customer, is the cost of serving a customer for one year. Prosonic Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: Number of units purchased 900unitsNumber of
batches 4batchesNumber of orders 1orderDirect labor-hour requirement 0.10DLHs per unitSelling price$29.95per unitDirect materials cost$6.40per unitDirect labor cost$1.85per unit According to the ABC system, the total cost of the activity "Processing batches" for this customer this past year was closest to:
A. $138.35
B. $553.40
C. $630.40
D. $77.00
Answer: B
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