Fermi Company decided to look more closely at the materials
Fermi Company decided to look more closely at the materials receiving activity in its factory. The driver for receiving is the number of receiving orders. The following information for a year was collected:
Demand for receiving orders: 130,000
Resources needed:
a. 6 workers capable of completing 25,000 receiving orders per year. (The completion of a receiving order requires unloading the materials onto the receiving dock, checking the receiving order against the purchase order and invoice, and carrying the materials to the materials storeroom.) Salary is $ 27,000 for each worker
b. Supplies (paper, grease markers, small tools, rags) expected to cost $ 0.80 per receiving order
c. Workbenches, dollies, computers, etc.; depreciation $ 14,400 per year d. Space for the receiving dock, utilities; $ 9,800 per year
Required:
1. Prepare a static budget for the receiving activity for the year.
2. Calculate the cost per receiving order based on annual demand for receiving orders.
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