A company uses activity-based pricing. The pricing structure is to charge customers the direct cost of the product they order with a markup of 30% on direct costs plus the cost of the provided services. The service costs are $8.00 per order, $12.00 for each product ordered, and $2.00 per pound for shipping. Ozuma Industries makes 10 orders for goods with a direct cost of $10,000. They order 80 different products that weigh a total of 1,800 lbs. What is the total price paid by Ozuma?
A company uses activity-based pricing. The pricing structure is to charge customers the direct cost of the product they order with a markup of 30% on direct costs plus the cost of the provided services. The service costs are $8.00 per order, $12.00 for each product ordered, and $2.00 per pound for shipping. Ozuma Industries makes 10 orders for goods with a direct cost of $10,000. They order 80 different products that weigh a total of 1,800 lbs. What is the total price paid by Ozuma?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 14E: Many different businesses employ markup on cost to arrive at a price. For each of the following...
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A company uses activity-based pricing. The pricing structure is to charge customers the direct cost of the product they order with a markup of 30% on direct costs plus the cost of the provided services. The service costs are $8.00 per order, $12.00 for each product ordered, and $2.00 per pound for shipping. Ozuma Industries makes 10 orders for goods with a direct cost of $10,000. They order 80 different products that weigh a total of 1,800 lbs. What is the total price paid by Ozuma?
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