Question & Answer: The price of a product is $6.85. Shipment cost from Omaha to B is $3.20 and Omaha to A is $5.98….

The price of a product is $6.85. Shipment cost from Omaha to B is $3.20 and Omaha to A is $5.98. Calculate the phantom cost for B What is the freight absorption cost for A If this company charges a fixed price of $11.00 per product irrespective of zones, how much will it make on shipment selling a product in zone B?

The price of a product is .85. Shipment cost fro

Expert Answer

Ans. a) Replacement cost is required to calculate the Phantom cost.

b) Freight absorption cost for shipment to A is $ 12.83 (Cost of production + shipment cost)

c) Comany will make $ 0.95 per product by selling the product in zone B {Product price- (Product cost+freight cost)}.

Still stressed from student homework?

Get quality assistance from academic writers!

Order now