Unique Finds Sells Fine Collectible Statues and Has Implemented Activity-Based

question 114

Multiple Choice

Unique Finds 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. Unique 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. The final cost pool is used for general operations of the department and the cost driver is the number of orders. Information about the activities is summarized below:
$\begin{array}{|l|c|c|c|}\hline\text { Cost Pool } & \begin{array}{c}\text { Estimated } \\\text { Total Costs }\end{array} & \text { Cost Driver } & \text { Estimated } \\&&&\text { Annual Activity }\\\hline \text { Packaging and shipping } & \$ 67,200 & \text { Number of boxes shipped } & 16,000 \text { boxes } \\\hline \text { Final inspection } & 200,000 & \text { Number of individual items inspected } & 100,000 \text { items } \\\hline \text { General operations } & 85,000 & \text { Number of orders } & 10,000 \text { orders } \\\hline\end{array}$
During June, 2,100 boxes were packed and shipped. How much is the packaging and shipping cost for each box shipped?

• A) $0.24
• B) $7.62
• C) $4.20
• D) $32.00

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Definitions:

Trade Agreement

A treaty between two or more nations regarding the terms of trade between them, often aiming to reduce tariffs and foster trade.

Central America

A region located in the southernmost part of North America, consisting of seven countries between Mexico to the north and Colombia to the south, known for its diverse geography and cultures.

International Monetary Fund

An international organization that aims to promote global economic stability and growth by providing monetary cooperation and financial assistance to its member countries.

Trade Among Participating Countries

The exchange of goods and services between member countries under agreed terms.