Republic Industries decides to price delivery services according to the results of a recent activity-based costing (ABC) study. The study indicates Republic should charge $8 per order, 2% of annual order value for general delivery costs, $1.25 per item, and $30 for delivery.A year later, Republic collected the following information for two of its best customers:Cost driverCustomer C Customer DNumber of orders 18 8 Number of deliveries 10 10 Total number of items 2,000 4,000 Annual order value$120,000 $80,000 What are the total delivery costs charged to Customer D during the year?
A. $6,964.
B. $5,344.
C. $5,364.
D. $6,900.
Answer: A
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