Republic Industries Decides to Price Delivery Services According to the Results

Multiple Choice

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:
$$\begin{array} { l r r } \text { Cost driver } & \text { Customer C } & \text { Customer D } \\\text { Number of orders } & 18 & 8 \\\text { Number of deliveries } & 10 & 10 \\\text { Total number of items } & 2,000 & 4,000 \\\text { Annual order value } & \$ 120,000 &8 0 , 0 0 0\end{array}$$
-
What are the total delivery costs charged to Customer C during the year?

A) $5,344.
B) $5,364.
C) $6,900.
D) $6,964.