Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. The following information is known about the purchasing department of Busy Company Traditional General Ledger Salaries Utilities Depreciation Supplies Insurance $240,000 $35,000 $90,000

2. The following information is known about the purchasing department of Busy Company Traditional General Ledger Salaries Utilities Depreciation Supplies Insurance $240,000 $35,000 $90,000 $30,000 $5,000 Total $400,000 ABC Activities Ordering goods Verifying orders Expediting orders Creating reports Supplier relations Total $170,000 $55,000 $45,000 $40,000 $90,000 $400,000 a. Identify several non-value-added activities in the purchasing department. b. Poor coordination of activities and poor scheduling may create the need to expedite orders. Expediting is often considered a non-value-added cost because customers do not want to pay to expedite (speed up) their orders when the items were not properly purchased originally. What might be some other specific causes of problems that would require expediting? c. Which insights and potential decisions would be possible with the ABC activities information provided that is not available with the traditional reporting of the general ledger accounts for the purchasing department? Be specific.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Operations management processes and supply chain

Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra

9th edition

9788131728840, 136065767, 8131728846, 978-0136065760

More Books

Students also viewed these Accounting questions