Calculate the Unit Cost of Cases Based on Wood Pallets

What is the unit cost of a case due to the wood pallets?

If there are 500 wood pallets that cost $91 each and hold 431 cases per pallet, how can we calculate the unit cost per case?

Unit Cost Calculation:

The unit cost of a case due to the pallets is calculated by dividing the total cost of all the pallets by the total number of cases they hold.

For 500 pallets each costing $91 and holding 431 cases, the unit cost per case will be approximately $0.21.

Explanation:

The unit cost in this scenario refers to the cost per case when the expenses of the pallets are distributed evenly among all the cases they hold.

Firstly, we determine the total cost of all the pallets, which is achieved by multiplying 500 pallets by $91 per pallet, resulting in a total cost of $45,500.

Next, we calculate the total number of cases that can be accommodated by all 500 pallets by multiplying 500 pallets with 431 cases per pallet, totaling 215,500 cases in total.

Finally, by dividing the total cost of the pallets by the total number of cases, we obtain the unit cost per case i.e., $45,500 divided by 215,500 cases equals roughly $0.21 per case.

Therefore, each case has a cost of approximately $0.21 due to the utilization of the wood pallets for transportation.