Bowling Green Manufacturing Co.has three orders to be shipped to different customers located in Seattle,Washington.The weights of the respective orders are 13,000 pounds,9,000 pounds,and 10,000 pounds.The cost to ship each order individually is $17 per 100 pounds.The shipments can be consolidated into a single order for a cost of $14 per 100 pounds with an additional charge of $250 per stop.Should the shipments be consolidated?
A)It does not matter; the cost is the same.
B)No,the cost is $210 higher with consolidation.
C)Yes,the cost is $210 lower with consolidation.
D)Yes,the cost is $750 lower with consolidation.

Question

Quizplus · Accepted Answer

To ship the orders individually, the cost for each order will be:

1. 13,000 pounds: 130 * $17 = $2,210
2. 9,000 pounds: 90 * $17 = $1,530
3. 10,000 pounds: 100 * $17 = $1,700

Total cost = $2,210 + $1,530 + $1,700 = $5,440

To consolidate the orders, the total weight will be 13,000 + 9,000 + 10,000 = 32,000 pounds. The cost will be:

1. Consolidation cost: 32 * $14 = $448
2. Additional charge for one stop: $250

Total cost = $448 + $250 = $698

Thus, consolidating the orders will be cheaper by $5,440 - $698 = $4,742

Therefore, the best choice is option C.