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

question 131

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: $$\begin{array} { | l | c | c | c | } \hline \multicolumn{1}{|c|} { \text { Cost Pool } } & \begin{array} { c } \text { Estim ated } \\\text { Total } \\\text { Costs }\end{array} & \text { Cost Driver } & \begin{array} { c } \text { Estim ated } \\\text { Annual } \\\text { Activity }\end{array} \\\hline \begin{array} { l } \text { Packaging and } \\\text { shipping }\end{array} & \$ 67,200 & \text { Number of boxes shipped } & 16,000 \text { boxes } \\\hline \text { Final inspection } & 200,000 & \begin{array} { c } \text { Number of individual items } \\\text { inspected }\end{array} & 100,000 \text { items } \\\hline \text { General operations } & 85,000 & \text { Number of orders } & 10,000 \text { orders } \\\hline\end{array}$$ During the period, the Eastern sales office generated 240 orders for a total of 3,560 items of which were shipped in 1,200 boxes.What amount of shipping department costs should be allocated to these sales?

• A)$9,480
• B)$5,040
• C)$14,200
• D)None of these answer choices are correct.

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Definitions:

Vicarious Liability

A legal principle that holds an entity or individual responsible for the actions of another party, typically in an employer-employee relationship.

Personal Fault

An individual's responsibility or blame for a mistake, accident, or wrongdoing, often influencing legal judgments or penalties.

Torts Committed

Acts or omissions leading to injury or harm to someone else, resulting in legal liability for the person responsible.

Course of Employment

Activities or duties performed by an employee that are part of their job responsibilities and typically within the scope of their employment.