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 $13 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 5,100 boxes are shipped.
$

Answer 1

glasses 13 times 2 =26 China 13times4=52 dinnerware 13 times 6= 78 fine China 5100 times 4 pounds =20400 pounds times 13 a pound =265200.