Total cost with or without consolidated shipment charge

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Reference no: EM132267502

Suppose Jones Company has orders from three customers located in the same market area. One order has a total weight of 4,900 pounds, the second weighs 9,600 pounds, and the third weighs 13,400 pounds. The transportation carrier quotes a freight rate of $18 per hundredweight (or cwt.) for direct shipment to the customer for shipments weighing 1,000 to 4,999 pounds, $16 per cwt. for orders weighing 5,000 to 9,999 pounds, and $14 for shipments weighing between 10,000 and 15,000 pounds. Alternatively, the carrier’s rate for shipments weighing more than 20,000 pounds is $10.00 per cwt. However, if the orders are combined into one consolidated shipment, the carrier will charge $390 for each stop it is required to make.

a. Calculate the total cost with or without consolidated shipment charge.

b. Should Jones consolidate the three shipments?

Reference no: EM132267502

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