Learning Objective 04-A1: Allocate selling, general and administrative expenses to products and assess profitability. Activity-based costing can be used to allocate selling, general, and administrative costs to products and determine the profitability of individual customers.

 Learning Objective 04-A1: Allocate selling, general and administrative expenses to products and assess profitability.

Activity-based costing can be used to allocate selling, general, and administrative costs to products and determine the profitability of individual customers.

Knowledge Check 01

Budgeted customer support cost for Liton Company is $100,000 for the year and budgeted technician miles is 1,000 per year. Liton Company’s customer support activity rate is $ _____ per mile.

 
Explanation

Knowledge Check 01

$100,000 divided by 1,000 = $100 per mile.

Thanks