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son4ous [18]
4 years ago
12

Ranada Company manufactures and sells sportswear products. Ranada uses activity-based costing to determine the cost of the custo

mer return processing and the shipping activity. The customer return processing activity has an activity rate of $45 per return, and the shipping activity has an activity rate of $10 per shipment. Ranada shipped 3,000 units of Product 1 in 1,200 shipments (some shipments are more than one unit). There were 150 returns.
Determine the per-unit customer costs for combined shipping and returns of Product 1.
a. $24.75 per unit
b. $2.25 per unit
c. $6.25 per unit
d. $55 per unit
Business
1 answer:
mote1985 [20]4 years ago
4 0

Answer: The customer cost for combined shipping and returns of Product 1 is <u>$6.25 per unit.(option c)</u>

We arrive at the answer as follows:

<u>A. Calculating cost of returns</u>

Cost of returns = Cost per returns * Number of returns

Cost of returns = 45 * 150

Cost of returns = 6750

<u>B. Calculating Cost of shipments</u>

Cost of shipments = Rate per shipment * Number of shipments

Cost of shipments = 10 * 1200

Cost of shipments = 12000

C.Calculate total cost of shipments and cost of returns

Total Cost = Cost of shipments + Cost of returns

Total Cost = 12000 + 6750

Total Cost = 18750

<u>D. Calculate cost per unit</u>

Cost per unit = \frac{Total Cost}{Number of units shipped}

Cost per unit = \frac{18750}{3000}

<u>Cost per unit = 6.25</u>







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