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 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.

Required:

Calculate the cost of each activity.

Unloading $

Counting $

Inspecting $

Question

Ripley

Business

13 January, 17:56

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 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.

Required:

Calculate the cost of each activity.

Unloading $

Counting $

Inspecting $

+4

Answers (1)

Know the Answer?

Cornelius Harper · Answer 1

Calculating the cost of each activity,

Unloading = $ 80,100

Counting = $ 37,500

Inspecting = $54,450

Explanation:

Given:

Unloading lease = $15,000 per year

Fuel for the forklift = $3,600 per year

Maintenance for the forklift = $1,500 per year

Inspection uses some special testing equipment that has depreciation of $1,200 per year

Operating cost = $750.

Receiving employees average salary = $50,000 per year

Salaries; 3 * 50,000 = 150,000

Unloading salary = 40% * 150,000 = 60,000

Counting salary = 25% * 150,000 = 37,500

Inspecting salary = 35% * 150,000 = 52,500

Unloading Counting Inspection

Equipment 15,000 1,200

Fuel 3,600

Operation cost 1,500 750

Labor 60,000 37,500 52,500

Total cost 80,100 37,500 54,450