Problem 11-9 A trucking company publishes the following rates: Shipment Weight C
ID: 349287 • Letter: P
Question
Problem 11-9 A trucking company publishes the following rates: Shipment Weight Cost per 100 Pounds $20.00 $18.00 $15.50 $14.00 $13.00 Less than 500 lbs 500-999 Ibs. ,000-4,999 lbs. 5,000-9,999 lbs. 0,000 lbs. or more Suppose you have eight shipments of 900 pounds each that the carrier will consolidate into one shipment, for an additional charge of $185 (total a. Calculate the total cost with or without consolidated shipment charge. Total cost using individual shipments Total cost using consolidated shipment b. Should you agree to consolidate the shipments? 0 No YesExplanation / Answer
a. Calculating total costs for shipments with and without consolidation.
Total Cost using individual shipment -
Number of shipments = 8 ---(given)
Weight of 1 shipment = 900 lbs. ---(given)
Cost per 100 lbs. = $18.00 ---(given)
Cost of 1 shipment = (900/100) * 18 = $162.00
Cost of 8 shipments = 162 * 8 = $1296.00
Total cost using consolidated shipments
Number of shipments = 8 ---(given)
Weight of 1 shipment = 900 lbs. ---(given)
Weight of 8 shipments = 900 * 8 = 7200 lbs.
Cost per 100 lbs. = $14.00 ---(given)
Additional charge for consolidation = $185.00 ---(given)
Cost of the shipment = (7200/100) * 14 = $1008.00
Cost including additional charge = 1008 + 185 = $1193.00
b. From the above calculations we can infer that the total cost after consolidation is lesser than individual shipments, hence you should agree to consolidate