DelauderEnterprises 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)$3.45per DLHProcessing batchesNumber of batches$193.30per batchProcessing ordersNumber of orders$83.05per orderServing customersNumber of customers$1,608.00per customerThe cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon 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 1,500unitsNumber
of batches 5batchesNumber of orders 2ordersDirect labor-hour requirement 0.25DLHs per unitSelling price$18.55per unitDirect materials cost$8.35per unitDirect labor cost$3.95per unitAccording to the ABC system, the total cost of the activity "Supporting assembly" for this customer this past year was closest to:
A. $1,293.75
B. $5,175.00
C. $0.86
D. $375.00
Answer: A
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