ASSIGNING COSTS TO ACTIVITIES Norrison Automotive produces brake systems for major automobile producers. The accounts payable department at Norrison has five clerks who process and pay supplier invoices. The total cost of their salaries is $250,000. The work distribution for the activities that they perform is as follows:

Activity Percentage of Time on Each Activity Comparing source documents 25%

Resolving discrepancies 45%

Processing payment 30%

Required:

Assign the cost of labor to each of the three activities in the accounts payable department.

Cornerstone Exercise