April,
This option is only for set your own shipping prices.
So if you want to put so much for the 1st item shipping prices and a lower price for each additional item shipping price you can not use calculated shipping.
That is the great thing about CS. It calculates multiple items based on the weight and size you've entered in the listings.
Weight is total weight of item + any packing + box.
Dimension is item + any packing only.
Sometimes though to get multiples to work we have to tweak the weights.
This works better on items over 1 lb.
Example, I sell goat coats in my other shop.
Some sizes with a box weigh around 1 lb. 10 ox.
So if 2 are bought, CS figures at a 3 lb. 4 oz rate.
But I can get 2 in a box for just under 3 lbs.
So what I do is put 1 lb. 6 or 7 oz for my item/box weight.
That way when 2 are bought, CS figures on a 2 lb. 14 oz rate.
It will not matter on 1 item since 1 lb. 10 oz is the same as 1 lb. 7 oz.
I also do this on lightweight items. Instead of rounding off say to 3 oz. I'll put 2.5 oz so CS will figure shipping at 5 oz. and not 6 oz.