How does the Cost method of apportioning work in Landed Cost?

Question

How are the calculations made when apportioning costs based on the Cost method

Answer

Example as follows when apportioning costs of 1,500.00:

For all items on the shipment, it calculates the total cost per lines as (Qty This Ship * Unit Cost)
Line 1 - inventory costs = 1,000
Line 2 - inventory costs = 6,000
Line 3 - inventory costs = 3,000

Then adds the total costs for the shipment - 1,000 + 6,000 + 3,000 = 10,000

The apportionment is then calculated as (Line Cost / Total Cost) * Cost to be apportioned ((1,000/10,000) * 1,500)
Line 1 apportioned costs = 150.00
Line 2 apportioned costs = 900.00
Line 3 apportioned costs = 450.00