Question

The budgeted customer support cost for Liton Company is $100,000 for the year, and the budgeted technician miles is 1,000 per year. What is Liton Company's customer support activity rate per mile?

1) 100
2) 200
3) 300
4) 400

Answer 1

The customer support activity rate per mile for Liton Company is calculated by dividing the total budgeted customer support cost of $100,000 by the technician miles of 1,000, yielding a rate of $100 per mile.

Step-by-step explanation:

The customer support activity rate per mile for Liton Company can be calculated by dividing the total budgeted customer support cost by the budgeted technician miles for the year.

To find this rate, we'll use the following formula: Activity Rate = Total Customer Support Cost / Technician Miles.

Plugging in the given numbers:

Activity Rate = $100,000 / 1,000 miles

Activity Rate = $100 per mile

Therefore, the customer support activity rate per mile for Liton Company is $100, which corresponds to option 1.