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The following data is obtained from the general records in the shipping department at Chicago Delivery Company for August: -- Inspecting packages prior to placement

The following data is obtained from the general records in the shipping department at Chicago Delivery Company for August:

-- Inspecting packages prior to placement on truck takes 1 minute per package.

-- Processing paperwork for each shipment (each truck loaded) takes 30 minutes.

-- Loading packages takes 1 minute of labor per package plus an additional 3 labor hours per truck

-- Miscellaneous tasks take 2 hours per truck.

-- Temporary employees to perform all of the above tasks can be hired for any amount of hours at a rate of $20 per hour during the summer (no benefits).

-- One supervisor is needed for every 1,000 hours of temporary employee labor (rounded up).

-- Supervisors are paid a flat rate of $4,100 per month.

-- Supervisors divide their time evenly among inspecting, processing, and loading activities, and miscellaneous tasks.

-- $1,000 per month general department overhead is allocated to miscellaneous tasks and $2,000 per month to loading, inspecting and processing activities.

August will have 12 working days. Chicago company expects to load 6 trucks per day during August.

There are on average 100 packages per truck.

Required:

Prepare a budget using the activity-based approach for the costs of inspecting, processing, loading, and miscellaneous activities within the shipping department for August.

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