An order is shipped to a retail customer who has ordered 8 individual items. This order will be shipped in 4 separate boxes. What is the packing and shipping cost that will be allocated to the order? $18.60 $4.20 $12.60 $8.40 $16.80 0 0 0 0
An order is shipped to a retail customer who has ordered 8 individual items. This order will be shipped in 4 separate boxes. What is the packing and shipping cost that will be allocated to the order? $18.60 $4.20 $12.60 $8.40 $16.80 0 0 0 0
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 9MC: Which is not a step In activity-based costing? A. identify the activities performed by the...
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Question
An order is shipped to a retail customer who has ordered 8 individual items. This order will be shipped in 4 separate boxes. What is the packing and shipping cost that will be allocated to the order?
$18.60
$4.20
$12.60
$8.40
$16.80
![ABC Co. implemented activity-based costing. Costs in the shipping department have been divided into
three cost pools.
The first cost pool contains costs that are related to packaging and shipping. ABC determined that the
number of boxes shipped is an appropriate cost driver for these costs.
The second cost pool is made up of costs related to the final inspection of each item before it is shipped
The cost driver for this pool is the number of individual items that are inspected.
The third cost pool is used for general operations of the department and the cost driver is the number of
orders.
Cost Pool
Packaging & Shipping
Inspection
General Operations
$67,200
$200,000
$85,000
Estimated Total Costs
Cost Driver
Number of boxes
shipped
Number items
inspected
Number of
orders
Estimated
Annual Activity
16,000 boxes
100,000 items
10,000 orders](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb87f551d-3fc5-4766-9e3a-b14ac4833b45%2F69abbdc3-b04d-4f8c-982e-42864bf98e6b%2Fg2yamf7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ABC Co. implemented activity-based costing. Costs in the shipping department have been divided into
three cost pools.
The first cost pool contains costs that are related to packaging and shipping. ABC determined that the
number of boxes shipped is an appropriate cost driver for these costs.
The second cost pool is made up of costs related to the final inspection of each item before it is shipped
The cost driver for this pool is the number of individual items that are inspected.
The third cost pool is used for general operations of the department and the cost driver is the number of
orders.
Cost Pool
Packaging & Shipping
Inspection
General Operations
$67,200
$200,000
$85,000
Estimated Total Costs
Cost Driver
Number of boxes
shipped
Number items
inspected
Number of
orders
Estimated
Annual Activity
16,000 boxes
100,000 items
10,000 orders
![An order is shipped to a retail customer who has ordered 8 individual items. This order will be shipped in
4 separate boxes. What is the packing and shipping cost that will be allocated to the order?
$18.60
$4.20
$12.60
$8.40
$16.80
0000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb87f551d-3fc5-4766-9e3a-b14ac4833b45%2F69abbdc3-b04d-4f8c-982e-42864bf98e6b%2Fd1ze7t6_processed.jpeg&w=3840&q=75)
Transcribed Image Text:An order is shipped to a retail customer who has ordered 8 individual items. This order will be shipped in
4 separate boxes. What is the packing and shipping cost that will be allocated to the order?
$18.60
$4.20
$12.60
$8.40
$16.80
0000
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