Shipping, however, is different. There are two activities associated with shipping: picking the order from
inventory and loading the paper. We employ 30 people for picking and 10 for loading, at an annual cost of
$1,200,000. Other shipping costs total $1,100,000. Picking and loading are more concerned with the number
of shipping items than with tonnage. That is, a shipping item may consist of two or three cartons instead of
pallets. Accordingly, the shipping costs of the distribution center should be assigned by using the number of
items shipped. In 2008, for example, we handled 190,000 shipping items.