Assume that the accounts payable department of a company has 5 clerks; each one is paid $25,000 per year ($125,000 total clerical salaries). On average, the clerks spend:

20% of their time on processing payments

30% of their time matching invoices, receiving documents, and billing statements

50% of their time correcting errors in the various documents

In addition, long-distance telephone costs of $1,700 are directly traced to the activity "correcting errors."

Required:

A.Assign the clerical salary cost to each of the three activities.

Processing payments

Matching documents

Correcting errors

B.What is the total cost of the "correcting errors" activity?