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

question 88

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: $$\begin{array} { | l | c | c | c | } \hline { \text { Cost Pool } } & \begin{array} { c } \text { Estimated } \\\text { Total } \\\text { Costs }\end{array} & \text { Cost Driver } & \begin{array} { c } \text { Estimated } \\\text { Annual } \\\text { Activity }\end{array} \\\hline \begin{array} { l } \text { Packaging and } \\\text { shipping }\end{array} & \$ 67,200 & \text { Number of boxes shipped } & 16,000 \text { boxes } \\\hline \text { Final inspection } & 200,000 & \begin{array} { c } \text { Number of individual items } \\\text { inspected }\end{array} & 100,000 \text { items } \\\hline \text { General operations } & 85,000 & \text { Number of orders } & 10,000 \text { orders } \\\hline\end{array}$$ 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:

Quantity Demanded

The amount of a good that buyers are willing and able to purchase at a specific price.

Quantity Demanded

The overall volume of a commodity or service that consumers are ready and able to buy at a certain price within a market.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specific period of time.

Equilibrium Price

The Equilibrium Price is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded.