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What amount of shipping department costs allocated to sales

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Question - Ritz Company 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 and Rand 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 and shipped. The final cost pool is used for general operations and supervision of the department and the cost driver is the number of shipments. Information about the department is summarized below:

Cost Pool

Total Costs

Cost Driver

Annual Activity

Packaging and shipping

$164,400

Number of boxes shipped

24,500 boxes

Final inspection

$203,400

Number of individual items shipped

99,600 items

General operations and supervision

$80,300

Number of orders

9,400 orders

During the period, the Far East sales office generated 696 orders for a total of 6,030 items. These orders were shipped in 1,460 boxes. What amount of shipping department costs should be allocated to these sales?

Reference no: EM132462776

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