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

question 4

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: $$\begin{array} { | l | c | c | c | } \hline { \text { Cost Pool } } & \begin{array} { c } \text { Estimated } \\\text { Total } \\\text { Costs }\end{array} & \text { Cost Driver } & \begin{array} { c } \text { Estimated } \\\text { Annual } \\\text { Activity }\end{array} \\\hline \begin{array} { l } \text { Packaging and } \\\text { shipping }\end{array} & \$ 67,200 & \text { Number of boxes shipped } & 16,000 \text { boxes } \\\hline \text { Final inspection } & 200,000 & \begin{array} { c } \text { Number of individual items } \\\text { inspected }\end{array} & 100,000 \text { items } \\\hline \text { General operations } & 85,000 & \text { Number of orders } & 10,000 \text { orders } \\\hline\end{array}$$ A new customer orders two items that can be shipped in a single box.What is the total shipping department cost that will be allocated to this order?

• A)$16.70
• B)$14.70
• C)$8.20
• D)None of these answer choices are correct.

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Definitions:

Categories

Classification of items or concepts into groups based on shared characteristics or attributes.

Exemplar Theory

A psychological theory suggesting that people categorize objects and concepts based on the comparison to typical instances or examples stored in memory.

Knowledge-based View

A perspective or theory emphasizing the role of knowledge in organizational capabilities and competitive advantage.

Classical View

The traditional perspective in various fields that emphasizes foundational principles and methodologies established through historical precedents.