Question
The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $19,500 per year. The forklift
The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $19,500 per year. The forklift is used only for unloading. The fuel for the forklift is $3,800 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has depreciation of $4,000 per year and an operating cost of $1,500. Receiving has three employees who have an average salary of $40,000 per year. The work distribution matrix for the receiving personnel is as follows: Activity Unloading Counting Inspecting Percentage of Time on Each Activity 40% 25% 35% No other resources are used for these activities. Required: 1. Calculate the cost of each activity. Unloading Counting Inspecting 2. Explain the two methods used to assign costs to activities. When the resource is used only by one activity, then direct tracing shared, as in the case of labor, then resource drivers is possible. When the activities are must be used.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started