Financial and Managerial Accounting exercise $19\mathrm{.}4$ solution step by step?

EXERCISE 19.4 Activity -Based Management Blake Furniture, mainlains an Receivable employs eight people. Blake is interested in doing an activity analysis because an outside firm has offcrcd to take over a portion of the activities currently handled by the Accounts Receivable Depart- The four main handled lhe are (l) hilling and payments, (2) customer service activities. (3) financial reporting and analyses. and (4) collecting delinquent accounts. The salaries paid to the depanment's employees are as follows: Manager. I @ S8S.OOOper year Clerks. 5 @ $30,000 per year Acmunt specialists. 2 @ 338.000 per year Total S 65.000 150.000 76.000 S291,ooo It is estimated that the manager of the Accounts Receivable Department spends an equal amount of her time supervising the four main activities. The clerks Slknd approximately half of their time on billing and recording paymenls. Their remaining time is divided equally activities and customer service The two account specialists spend half of their time on delinquent account activities, and the rest of their time is split equally between financial analysis activities and service activities the clerks nol qualified to perfonn. Paypro. Inc.. has proposed that it can perform all thc activities related to collecting delin- quent accounts for a fee of per year. The manager of Paypro argues that Blake can save because lhe in salaries paid 10 the specialisls who currently handle all delin- qucnt a&ounts can be eliminated. [f thc contract is accepted. it is estimated that the manager of the Accounts Receivable Department would need to devote a quarter of her time to dealing with Paypro employees. b. Using the information given, prepuc an activity table such as that in Exhibit 193 on page 846 to calculate the labor for personnel devoted to each of the four main activities of the Accounts Receivable Department. Should Blake accept Paypro's Offer to take Over its delinquent account activities?