Express Travel Decides to Price Delivery Services According to the Results

Multiple Choice

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:
$$\begin{array} { l r r r } \text { Cost driver } & \text { Customer A } & \text { Customer B } & \text { Customer C } \\\text { Number of orders } & 18 & 8 & 12 \\\text { Number of deliveries } & 10 & 10 & 24 \\\text { Total number of items } & 2,000 & 4,000 & 12,000 \\\text { Annual order value } & \$ 120,000 & \$ 80,000 & \$ 100,000\end{array}$$
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What are the total delivery costs charged to Customer B during the year?

A) $13,490.
B) $11,378.
C) $10,800.
D) $10,578.