Question

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 $8 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. Round answers to the nearest whole dollar.

a. Determine the shipping and handling activity for each product.
Glasses $
China $
Everyday dinnerware $
b. Determine the total shipping and receiving costs for the china if 3,500 boxes are shipped.
$

Answer 1

Answer and Explanation:

The computation is shown below:

a. For shipping and handling activity for each product is

For Glasses

= $8 × 2

= $12

For China

= $8 × 4

= $32

And, for Everyday dinner ware

= $8 × 6

= $48

b. the total shipping and receiving costs for the china is

= 3,500 × $32

= $112,000

Hence, in this way the parts could be determined