Question
Gala Inc. is a small distributor of mechanical pencils. Gala identifies its three major activities and cost pools as ordering, receiving and storage, and
Gala Inc. is a small distributor of mechanical pencils. Gala identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2021: (Click the icon to view the activity and cost pool details.) (Click the icon to view the 2021 operating income.) i (Click the icon to view additional information.) Required Operating income Activity and cost pool details Total $ 2,500,000 $ Per Unit 10.00 Activity Cost Driver Quantity of Cost Driver Cost per Unit of Cost Driver Revenues Costs: Purchase cost of pencils 1,250,000 5.00 1. Placing and paying for orders of pencil packs Number of orders 900 $100 per order Ordering costs 90,000 0.36 2. Receiving and storage Loads moved 4,500 $60 per load Receiving and storage 270,000 1.08 3. Shipping of pencil packs to retailers Number of shipments 1,500 $60 per shipment 90,000 0.36 Shipping 1,700,000 6.80 Total costs $ 800,000 $ 3.20 Print Done Operating income Ordering costs Print Done -
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