Problem 1

The following data is obtained from the general records in the shipping department at Rapid Parcel Delivery Company for August:

• Inspecting packages prior to placement on truck takes 1 minute per package.
• Processing paperwork for each shipment (each truck loaded) takes 30 minutes.
• Loading packages takes 2 minutes of labor per package plus an additional 3 labor hours per truck
• Miscellaneous tasks take 2 hours per truck.
• Temporary employees to perform all of the above tasks can be hired for any amount of hours at a rate of $20 per hour during the summer (no benefits).
• One supervisor is needed for every 1,000 hours of temporary employee labor (rounded up).
• Supervisors are paid a flat rate of $8,200 per month.
• Supervisors divide their time evenly among inspecting, processing, and loading activities, and miscellaneous tasks.
• $2,000 per month general department overhead is allocated to miscellaneous tasks and $4,000 per month to loading, inspecting and processing activities.
• August will have 24 working days.Rapid Parcel expects to load 12 trucks per day during August.There are on average 100 packages per truck.
• Required: Prepare a budget using the activity-based approach for the costs of inspecting, processing, loading, and miscellaneous activities within the shipping department for August