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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