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The Accounts Payable department at Pelletize Grillz uses a time - driven activity - based costing system. The company estimates that each minute of time
The Accounts Payable department at Pelletize Grillz uses a timedriven activitybased costing system. The company estimates that each minute of time in the Accounts Payable department uses $ worth of resources. Pelletize Grillz, which is very cautious with new vendors, implements an extensive qualitycontrol check on all items received for the first months of using a new vendor. Management believes that after months, the quality control check is no longer needed.
Management has estimated the amount of time that each activity uses as follows:
Activity Driver Estimated Minutes
Process invoice Invoice
Set up new vendor First order from new vendor
Quality control Units received in first months with a new vendor
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