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5) 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

5)

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

$160,300

Number of boxes shipped

22,500 boxes

Final inspection

$201,200

Number of individual items shipped

97,400 items

General operations and supervision

$84,900

Number of orders

9,800 orders

During the period, the Far East sales office generated 673 orders for a total of 6,050 items. These orders were shipped in 1,305 boxes. What amount of shipping department costs should be allocated to these sales?

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