(1) 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 per-unit customer costs for combined shipping and returns of Product 1.

a. $6.25 per unit

b. $55 per unit

c. $24.75 per unit

d. $2.25 per unit

(2) Sebastian Company manufactures and sells sportswear products. Sebastian 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 $60 per return, and the shipping activity has an activity rate of $20 per shipment. Sebastian shipped 4,000 units of Product 1 in 800 shipments (some shipments are more than one unit). There were 90 returns.

Determine the total activity costs for the return and shipping activities of Product 1.

a. $21,400

b. $5,500

c. $5,400

d. $71,200

(3) Activity rates are calculated by

a. Multipling the budgeted activity cost by the total activity-base usage.

b. None of these choices are correct.

c. Dividing the total activity-base usage by the budgeted activity cost.

d. Dividing the budgeted activity cost by the total activity-base usage.

Answer rating: 100% (QA)

1 a 625 per unit Activity cost for the return 45 x 150 return... View the full answer