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

question 139

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: $$\begin{array} { | l | c | c | c | } \hline { \text { Cost Pool } } & \begin{array} { c } \text { Estimated } \\\text { Total } \\\text { Costs }\end{array} & \text { Cost Driver } & \begin{array} { c } \text { Estimated } \\\text { Annual } \\\text { Activity }\end{array} \\\hline \begin{array} { l } \text { Packaging and } \\\text { shipping }\end{array} & \$ 67,200 & \text { Number of boxes shipped } & 16,000 \text { boxes } \\\hline \text { Final inspection } & 200,000 & \begin{array} { c } \text { Number of individual items } \\\text { inspected }\end{array} & 100,000 \text { items } \\\hline \text { General operations } & 85,000 & \text { Number of orders } & 10,000 \text { orders } \\\hline\end{array}$$ An order is shipped to a retail customer who has ordered 6 individual items.This order will be shipped in 3 separate boxes.What is the packing and shipping cost that will be allocated to the order?

• A)$4.20
• B)$4.03
• C)$25.20
• D)$12.60

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Definitions:

Hunger Pangs

Feelings of discomfort or weakness caused by a lack of food, often signaling the need to eat.

Body Mass Index

A measure of body fat based on height and weight that applies to adult men and women, used to categorize underweight, normal weight, overweight, and obesity.

Obese

Having an excessive amount of body fat, typically measured by body mass index (BMI) of 30 or higher.

Prader-Willi Syndrome

A genetic disorder characterized by obesity, intellectual disability, and short stature, among other symptoms, resulting from an anomaly in chromosome 15.