Consider the following data for an accounts receivable (A/R) department:

The cost of operating the department is $8 million per year. The A/R department has 64 clerks, each of whom works about 130.21 hours per month, net of time off for vacations, holidays, sick leave, personal leave, work breaks during the day, and time consumed in meetings, training, and education.

The A/R clerks perform the following tasks:

1. Send invoices to customers each month

2. Receive, record, and deposit cash receipts

3. Maintain customer files (name, address, credit rating, payment history, outstanding invoices)

The TDABC project team, through direct observation, obtains the following data:

Manual processing of invoice and cash receipt1.0 hour

Electronic processing of invoice and cash receipt0.1 hours

Maintain customer credit file (annual)0.5 hours