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Please show detailed work. Thanks 41 7 30 S Question 21 (8 points) Subject Company has an Accounts Receivable Department that performs three activities within
Please show detailed work. Thanks
41 7 30 S Question 21 (8 points) Subject Company has an Accounts Receivable Department that performs three activities within the department: processing customer credit applications, invoicing customers, and performing collection activities. During interviews, the employee survey reports that they spend 15% of their time processing credit applications, 55% of their time invoicing customers, and 30% of their time on collection activities. The Accounts Receivable Department employs 10 associates for a total cost of $200,000. Assume each associate works 8 hours per day, 20 days per month, but an estimate of practical capacity is 80%. After close observation of the employee's daily work, managers conclude the following: Processing a credit application: Processing invoice: Collection activities: The estimated monthly quantities of work in the three activities are 500 credit applications, 18,000 invoices, and 900 collection calls. Required: 35 minutes 10 minutes 20 minutes 1 2 Under a traditional ABC system, what is the cost of one unit of activity? Assuming the practical capacity information, what is the cost per minute of supplying capacityStep by Step Solution
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