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

question 119

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, 4,000 items were sold reflecting 800 orders that were packed and shipped in 2,100 boxes.What amount is allocated to each order for general operations of the department?

• A)$4.20
• B)$29.53
• C)$8.50
• D)$10.00

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