Bienstar Company has 15 clerks that work in its accounts payable department. A study revealed the following

Question:

Bienstar Company has 15 clerks that work in its department. A study revealed the following activities and the relative time demanded by each activity:
Percentage of
Activities Clerical Time
Comparing purchase orders and receiving orders and invoices . 15%
Resolving discrepancies among the three documents ...... 70
Preparing checks for suppliers ............... 10
Making journal entries and mailing checks .......... 5

The average salary of a clerk is $38,000.

Required:
Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value added.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...