Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Thompson Manufacturing Company has three salaried clerks to process purchase orders. Each clerk is paid a salary of $28,000 and is capable of processing 5,000

image text in transcribed
Thompson Manufacturing Company has three salaried clerks to process purchase orders. Each clerk is paid a salary of $28,000 and is capable of processing 5,000 purchase orders per year (working efficiently). In addition to the salaries, Thompson spends $7,500 per year for forms, postage, etc. Thompson assumes 15,000 purchase orders will be processed. During the year, 12,500 orders were processed. "Customer 001" acquired 112.000 units during the year, the average size of his orders was 2.800 units: whereas Customer 165" acquired 7 units in a single transaction with the Company. Required: 1. Calculate the activity rate for the purchase order activity. Break the activity into fixed and variable components. 2. Compute the total activity availability, and break this into activity output and unused activity. 3. Calculate the total cost of the resource supplied, and break this into the cost of activity output and the cost of unused activity. 4. Assign the cost of purchase order activity to the two customers. How much is the cost per unit for each of them? 5. Measure the difference in complexity" between the two customers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Ethics A Stakeholder And Issues Management Approach

Authors: Joseph W. Weiss

7th Edition

1523091541, 978-1523091546

Students also viewed these Accounting questions