Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the...
Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $10 per pound. A box of glasses weighs 2 pounds, a box of fine china weighs 4 pounds, and a box of everyday dinnerware weighs 6 pounds. a Determine the shipping and handling activity cost to be allocated to each unit of product. Glasses $ Fine China $ Everyday dinnerware $ b Determine the total shipping and receiving costs to be allocated to the fine china if 2,200 boxes are shipped. $
Homework Answers
a)
| Product | Activity | Activity rate | Cost to be allocated |
| Glasses | 2 pounds | $10 per pound | 2 x 10 = $20 |
| Fine china | 4 pounds | $10 per pound | 4 x 10 = $40 |
| Everyday dinnerware | 6 pounds | $10 per pound | 6 x 10 = $60 |
b)
Total shipping and receiving costs to be allocated to the fine china if 2,200 boxes are shipped = 2,200 x 4 x 10
= $88,000
Kindly comment if you need further assistance. Thanks
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