Question:
Allocation of Freight. An invoice for the raw materials A, B, and C is received from the Lawson Manufacturing Company. The invoice totals are A, $15,000; B, $8,000; and C, $22,000. The freight charges on this shipment weighing 9,000 kilograms are $990. Shipping weights for the respective materials are 2,900, 2,400, and 3,700 kilograms.
Required:
(1) The cost per kilogram to be entered on the materials ledger cards for A, B, and C if each dollar of invoice cost is assigned an equal portion of the freight charge.
(2) The cost per kilogram to be entered on the materials ledger cards for each material if the freight cost is assigned on a basis of shipping weight for each material.