Tibet Company sells glasses, fine china, and everyday dinnerware. They use activ

Question

Tibet Company sells glasses, fine china, and everyday dinnerware. They use activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $9 per pound. A box of glasses weighs 2 lbs, the box of china weighs 4 lbs, and a box of everyday dinnerware weighs 6 lbs.

(a)  Determine the shipping and handling activity for each product.

(b)  Determine the total shipping and receiving costs for the china if 2,900 boxes are shipped.
$

Explanation / Answer

Glasses: $18 (2lbs*$9/lb)

China: $36 (4lbs*$9/lb)

Everday dinnerware: $54 (6lbs*$9/lb)

(b) $104,400 (Assuming this is just the china -- 2,900 boxes*4lbs/box*$9/lb)

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