Usry Company decided to look more closely at the materials receiving activity in its factory. The driver

Question:

Usry 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. 4 workers, capable of completing 35,000 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 $30,000 for each worker.

b. Supplies (paper, grease markers, small tools, rags) expected to cost $0.50 per receiving order.

c. Workbenches, dollies, computers, etc., depreciation: $5,800 per year.

d. Space for the receiving dock, utilities, $10,400 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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