What amount of shipping department costs should be allocated to these sales?
Ritz Company sells fine collectible statues and has 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 and Rand has 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 and the cost driver for this pool is the number of individual items that are inspected and shipped. The final cost pool is used for general operations and supervision of the department and the cost driver is the number of shipments. Information about the department is summarized below:
| Cost Pool | Total Costs | Cost Driver | Annual Activity |
| Packaging and shipping | $166,100 | Number of boxes shipped | 22,600 boxes |
| Final inspection | $203,500 | Number of individual items shipped | 98,500 items |
| General operations and supervision | $80,000 | Number of orders | 8,900 orders |
During the period, the Far East sales office generated 684 orders for a total of 6,140 items. These orders were shipped in 1,435 boxes. What amount of shipping department costs should be allocated to these sales?
Need assignment help for this question?
If you need assistance with writing your essay, we are ready to help you!
OUR PROCESS
Order
Payment
Writing
Delivery
Why Choose Us: Cost-efficiency, Plagiarism free, Money Back Guarantee, On-time Delivery, Total Сonfidentiality, 24/7 Support, 100% originality
