Microtech Incorporated has decided to package its cell phone in a smaller, recyc
ID: 382460 • Letter: M
Question
Microtech Incorporated has decided to package its cell phone in a smaller, recyclable package. Additionally, the company will discontinue the practice of shipping each phone with a 250-pageuser manual and instead will make the manual available online. These changes will result in a lighter, but more difficult package for shippers to handle. The weight of each packaged phone has dropped from 1.1 pounds to 0.4 pounds as a result of these changes and the freight classification has worsened from 65 to 85.
Use the table below to calculate the difference in Microtech'smonthly shipping charges if the company ships
12,500 phones per month.
Before the changes in packaging, shipping costs are $ per month. (Enter your response rounded to two decimal places.)
Matrix of Weight Breaks and Freight Class ($/cwt) Class 50 500 (lbs) 30.87 33.25 35.63 37.75 40.18 43.29 46.71 50.3 54.24 1,000 (lbs) 21.83 23.51 25.19 26.69 28.4 30.61 33.03 35.57 38.35 2,000 (lbs) 20.74 22.34 23.94 25.36 26.99 29.09 31.38 33.8 36.45 5,000 (lbs) 15.82 17.04 18.26 19.34 20.59 22.19 23.94 25.78 27.8 220,000 (lbs) 9.42 10.42 11.42 12.13 13.13 14.27 15.71 16.98 18.41 500 (lbs) 10,000 (lbs) 14.17 15.67 60 65 70 77.5 85 92.5 100 25.49 27.45 29.42 31.18 33.17 35.75 38.57 41.54 44.79 18.24 19.75 21.47 23.62 25.54 27.69Explanation / Answer
Weight of 12500 phones before the changes = 12500*1.1= 13750lbs
According to freight classification of 65 the shipping cost are =18.24*13750= $250800 per month
Weight of 12500 phones after the changes = 12500*0.4=5000lbs
According to freight class of 85 the shipping cost are =23.94*5000= $119700 per month
Difference in shipping charges= 250800-119700=$131100(reduction in shipping charges)
Before the changes in packaging shipping cost are $250800