Question - Beta Company is preparing its annual profit plan. As part of its analysis of the profitability of its customers, management estimates that the $12,000 for sales support should be assigned to the individual customers from the information given as follows:
Customer A Customer B
Units Purchased 100,000 200,000
Purchase orders (annual) 5 20
What is the amount of the sales support costs that should be allocated to Customer A assuming Beta uses units purchased to compute activity-based costs?
A. $2,400
B. $4,000
C. $8,000
D. $9,600