Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $14 per pound. A box of glasses weighs 2 pounds, a box of fine china weighs 4 pounds, and a box of everyday dinnerware weighs 6 pounds.
a. Determine the shipping and handling activity cost to be allocated to each unit of product.
b. Determine the total shipping and receiving costs to be allocated to the fine china if 3,500 boxes are shipped.

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The Answer of Shanghai Company sells glasses, fine china, and everyday dinnerware. It uses activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $14 per pound. A box of glasses weighs 2 pounds, a box of fine china weighs 4 pounds, and a box of everyday dinnerware weighs 6 pounds.
a. Determine the shipping and handling activity cost to be allocated to each unit of product.
b. Determine the total shipping and receiving costs to be allocated to the fine china if 3,500 boxes are shipped.

Shanghai Company Sells Glasses, Fine China, and Everyday Dinnerware