Glitter Inc. is a small distributor of mechanical pencils. Glitter identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016:

BE (Click the icon to view the activity and cost pool details.)

For 2016, Glitter buys 250,000 pencil packs at an average cost of $4 per pack and sells them to retailers at an average price of $7 per pack. Assume Glitter has no fixed costs and no inventories.

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Question 1

alcul

Requirement

Data table

Calculate Glitter's operating income for 2016.

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Cost Driver

Activity

1. Placing and paying for orders of pencil packs Number of orders

Loads moved

Receiving and storage

Shipping of pencil packs to retailers

Number of shipments

Quantity of Cost per Unit of

Cost Driver

Cost Driver

600 $100 per order

5.000

$60 per load

1,500 $70 per shipment

Total costs

Operating income

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Glitter Inc. is a small distributor of mechanical pencils. Glitter identifies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016 : (Click the icon to view the activity and cost pool details.) alcula Data table