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Assigning Costs to Activities McCourt Company produces small engines for lawnmower producers. The accounts payable department at McCourt has 10 clerks who process and pay
Assigning Costs to Activities McCourt Company produces small engines for lawnmower producers. The accounts payable department at McCourt has 10 clerks who process and pay supplier invoices. The total cost of their salaries is $800,000. The work distribution for the activities that they perform is as follows: Percentage of Time on Each Activity Activity Comparing source documents Resolving discrepancies 10 % 45 % Processing payment 45 % Required: Assign the cost of labor to each of the three activities in the accounts payable department. Round your answers to the nearest dollar. Activity Cost Assignment Comparing source documents Resolving discrepancies III Processing payment Activity-Based Customer Costing Sleepeze Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Sleepeze's customer activity are as follows: Large Retailer Smaller Retailers Units purchased 108,000 72,000 Orders placed 3,600 Number of sales calls 882 Manufacturing costs $43,200,000 $28,800,000 Order filling costs allocated* $1,418,040 $945,360 Sales force costs allocated $864,000 $576,000 36 18 *Currently allocated on sales volume (units sold). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Required: Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar. Order filling rate per order per sales call Selling call rate Cost assignment: Large retailer Smaller retailers
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