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11 September, 13:21

Ranada company manufactures and sells sportswear products. ranada uses activity-based costing to determine the cost of the customer 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 total activity costs for the return and shipping activities of product 1.

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  1. 11 September, 13:43
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    The total activity costs for the return and shipping activities of product 1 are -

    Total activity costs for the return and shipping activities = (Per return costs X number of returns) + (Per shipping costs X number of shipments)

    Total activity costs for the return and shipping activities = ($ 45 X 150 returns) X ($ 10 X 1,200 shipments)

    Total activity costs for the return and shipping activities = $ 18,750
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