Assigning Costs to Activities, Resource Drivers

The receiving department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is

leased for $$15,000$ per year. The forklift is used only for unloading. The fuel for the forklift is $$3,600$ per year. Other operating

costs $($maintenance$)$ for the forklift total $$1,500$ per year. Inspection uses some special testing equipment that has

depreciation of $$1,200$ per year and an operating cost of $$750.$ Receiving has three employees who have an average salary of

$$50,000$ per year. The work distribution matrix for the receiving personnel is as follows:

No other resources are used for these activities.

Required:

Calculate the cost of each activity.

Explain the two methods used to assign costs to activities.

When the resource is used only by one activity, then

is possible. When the activities are shared, as in

the case of labor, then

must be used.