Question

A company has three groups of products, A, B, and C. Recently, the company paid $1,800 for shipping fees and received 8,500 units that are allocated among these three groups. Below is the information of these three groups: (30 pts)

Group	Number of Units	Sales Price per unit
A	2,500	0.15
B	5,500	0.36
C	500	0.72

(2) Using the relative sales value method, what is the cost per item in Group B?

(3) Using the relative sales value method, what is the cost per item in Group C?

Answer 1

Group	Units	Selling Price	Sales Value	Weights	Weight*$1,800
A	2500	0.15	375	0.1381	248.6
B	5500	0.36	1980	0.7293	1312.7
C	500	0.72	360	0.1326	238.7
Total			2715	1.0000	1800.0

1.Group B

Total cost allocated to Group B=$1,312.7

No o f Units =5500 Units

Cost Per Unit =$0.239.(1312.7/5500)

2. Group C

Total cost allocated to Group C=$238.7

No o f Units =500 Units

Cost Per Unit =$0.477.(238.7/500)

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