Rand 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:

An order is shipped to a retail customer who has ordered 10 individual items. This order will be shipped in 3 separate boxes. What is the shipping department cost that will be allocated to the order?

$17.30

$173.00

$48.90

$40.40

Cost Pool Packaging and shipping Final inspection Total Costs $170,000 Cost Driver Number of boxes shipped Number of individual items shipped Annual Activitv 25,000 boxes $200,000 100,000 items General operations and supervision $85,000 Number of orders 10,000 orders