Activity-based costing: selling and administrative expenses
Fancy Feet Company manufactures and sells shoes. Fancy Feet 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 $12 per sales order, and the shipping activity has an activity rate of $20 per shipment. Fancy Feet sold 27,500 units of walk- ing shoes, which consisted of 5,000 orders and 1,400 shipments. Determine (a) the total and (b) the per-unit sales order processing and shipping activity cost for walking shoes.
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