Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

RitzCompany 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

RitzCompany 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 $168,900 Number of boxes shipped 21,400boxes
Final inspection $196,100 Number of individual items shipped 98,500items
General operations and supervision $83,600 Number of orders 8,700orders

During the period, the Far East sales office generated680 orders for a total of6,040 items. These orders were shipped in1,451 boxes. What amount of shipping department costs should be allocated to these sales?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting for Non-Accounting Students

Authors: John R. Dyson

8th Edition

273722972, 978-0273722977

More Books

Students also viewed these Accounting questions