The Local USPS Office Sorts Letters by Zip Code

question 79

Essay

The local USPS office sorts letters by zip code. During the month of March, 200,000 letters were sorted. The cost of sorting includes the following:

a. Explain why process costing is appropriate for this operation.
b. Calculate the cost per letter for this operation.
c. There are no direct materials used for the sorting operation. Is the absence of direct materials typical of services? If not, provide examples of services that use direct materials.

---

Definitions:

AUM

The cumulative market value of all investments managed by an individual or organization for its clients.

Net IRR

Net Internal Rate of Return is a performance measure that calculates the profitability of an investment adjusted for all cash flows and costs incurred.

Investors

Individuals or entities that allocate capital with the expectation of receiving financial returns, which can involve a variety of assets including stocks, bonds, and real estate.

AUM

Assets under management, the total market value of the investments that a person or entity manages on behalf of clients.