Answer:
a) Total Sales order $60,000 and total Shipping is $28,000
b) Per unit sales order processing cost = $2.18 and shipping activity cost per walking shoe = $1.02
Explanation:
The question is divided into two parts
Part 1 ) Determine the Total Activity Cost as follows
Activity Order Rate Total (Order x rate)
Sales Order Processing 5000 orders $12/order $60,000
Shipping 1400 shipments $20/shipmt $28,000
Total $88,000
Part 2)
a) Per-unit sales order processing cost
What is the sales order activity cost $60,000 and the number of walking shoes =27,500
Therefore Per unit cost = $60,000 / 27,500 = $2.18 per unit
b) Shipping activity cost per walking shoes
Shipping cost = $28,000 and the number of shoes 27,500
Per Unit Cost of shipping = $28,000/27,500 = $1.02 per unit
The total Activity cost therefore is $2.18 + $1.02 = $3.20
