Microtech Incorporated has decided to package its cell phone in a smaller, recyc

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-page user 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 0.9 pounds to 0.4 pounds as a result of these changes and the freight classification has worsened from 55 to 65. Use the table below to calculate the difference in Microtech's monthly shipping charges if the company ships 12,500 phones per month.

Explanation / Answer

Weight of smartphones shipped per month previously = 12500x0.9 =11250 lbs

Rate ( According to class 55) = 19.15 per cwt = 19.15/100 lbs

Rate of 11250 lbs = 19.15x11250 /100 =$ 2154.37

Case II - Rate with reduced weight -

Weights of new shipment = 0.4

Total weight = 12500 x0.4 = 5000

Rate ( According to class 65) = 23.64 /cwt

Total freight rate = 23.64 x 5000 /100 = $1182

Difference in shipping charges = 2154.37-1182 = $972.37

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects