Comfort Step Company manufactures and sells shoes. Comfort Step uses activity-based costing to determine the cost of the sales order processing and the shipping activity. The sales order processing activity has an activity rate of $69 per sales order, and the shipping activity has an activity rate of $5 per shipment. Comfort Step sold 20,000 units of walking shoes, which consisted of 3,500 orders and 300 shipments.
a. Determine the total sales order processing
and shipping activity cost for walking shoes.
$__________
b. Determine the per-unit sales order
processing and shipping activity cost for walking shoes. If
required, round your answer to the nearest cent.
___________$per unit
a. Total Sales Order Processing Cost = Activity Rate * Total Orders
= $ 69 * 3,500 Orders
= $ 241,500
Total shipping activity cost = Activity Rate * Total Shipments
= $ 5 * 300 Shipments
= $ 1,500
Hence the correct answer is :
Total Sales Order Processing Cost = $ 241,500
Total shipping activity cost = $ 1,500
b. per-unit sales order processing cost = Total Sales Order Processing Cost / Total Units
= $ 241,500 / 20,000 Units
= $ 12.075
= $ 12.08
Per Unit shipping activity cost = Total shipping activity cost / Total Units
= $ 1,500 / 20,000 Units
= $ 0.075
= $ 0.08
Hence the correct answer is :
per-unit sales order processing cost = $ 12.08
Per Unit shipping activity cost = $ 0.08
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