Refer to the previous discussion of the receiving activity at the Boeing plant and Exhibit 2.4. The plant manager is looking at a monthly report of plant costs and notices that the receiving activity costs vary substantially from month to month. He is interested in knowing more about why the total cost and unit costs of the receiving activity changes when the number of parts received changes. He gives you the data for parts received for the last several months and you note that the range is from 10,000 to 30,000.

Exhibit 2.4

1. Prepare a table that shows the cost of each resource, the total cost, and the total cost on a per-part-received basis. Use increments of 5,000 parts beginning with 10,000.

2. Prepare brief explanations of why the total and unit cost patterns change.

Transcribed Image Text:

EQUIPMENT RESOURCE €45,000 FUEL RESOURCE €.80 PER PART RECEIVED RECEIVING ACTIVITY Cost driver Number of parts received