Question: The Receiving Department has three activities unloading counting goods and

The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $ 15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $ 3,600 per year. Other operating costs (maintenance) for the forklift total $ 1,500 per year. Inspection uses some special testing equipment that has a depreciation of $ 1,200 per year and an operating cost of $ 750. Receiving has three employees who have an average salary of $ 50,000 per year. The work distribution matrix for the receiving personnel is as follows:
Activity Percentage of Time on Each Activity
Unloading ............... 40%
Counting ................ 25%
Inspecting ................ 35%
No other resources are used for these activities.
1. Calculate the cost of each activity.
2. Explain the two methods used to assign costs to activities.

View Solution:

Sale on SolutionInn
  • CreatedSeptember 22, 2015
  • Files Included
Post your question