[Figure 5-1]. - The receiving department of Owen has three activities: unloading, counting goods, and inspecting. Unloading requires a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $2,000 per year. Inspection requires special testing equipment that has a depreciation of $500 per year and an operating cost of $1,000 per year. Receiving has four employees who each have an average salary of $35,000 per year. The work distribution matrix for the receiving personnel is as follows:
Activity Percentage of Time on Each Activity
Unloading 25%
Counting 40%
Inspecting 35%
Refer to [Figure 5-1].
(5a) - Calculate the cost of unloading.
(5b) - Calculate the cost of counting
(5c) - Calculate the cost for inspection
dvsdvs
$20000
To calculate the costs of the activities in the receiving department of Owen, we will follow these steps:
Step 1: Calculate the cost of unloading:
The cost of unloading includes forklift lease and fuel.
The forklift lease cost is $15,000 per year.
The fuel cost for the forklift is $2,000 per year.
Therefore, the total cost of unloading is $15,000 + $2,000 = $17,000.
Answer (5a): The cost of unloading is $17,000.
Step 2: Calculate the cost of counting:
The cost of counting includes the salaries of the four employees assigned to this activity.
The average salary of each employee is $35,000 per year.
The percentage of time spent on counting by each employee is 40%.
Therefore, the cost for counting is ($35,000 * 4) * 40% = $56,000.
Answer (5b): The cost of counting is $56,000.
Step 3: Calculate the cost of inspection:
The cost of inspection includes the depreciation cost of the testing equipment and the operating cost.
The depreciation cost of the testing equipment is $500 per year.
The operating cost of the testing equipment is $1,000 per year.
Therefore, the total cost of inspection is $500 + $1,000 = $1,500.
Answer (5c): The cost for inspection is $1,500.
To calculate the cost of each activity in the receiving department of Owen, we need to consider the relevant expenses associated with each activity mentioned in the question.
(5a) - Cost of Unloading:
To calculate the cost of unloading, we need to take into account the costs of forklift leasing and fuel.
1. Forklift Leasing: The forklift is leased for $15,000 per year, and since it is used only for unloading, the full leasing cost is allocated to this activity.
Therefore, the cost of forklift leasing for unloading is $15,000 per year.
2. Fuel: The fuel cost for the forklift is $2,000 per year, and since it is used only for unloading, the full fuel cost is allocated to this activity.
Therefore, the cost of fuel for unloading is $2,000 per year.
Hence, the total cost of unloading is $15,000 + $2,000 = $17,000 per year.
(5b) - Cost of Counting:
To calculate the cost of counting, we need to consider the cost of employees' salaries.
1. Employees' Salaries: There are four employees in the receiving department, and each has an average salary of $35,000 per year. The work distribution matrix tells us that counting requires 40% of the employees' time.
Therefore, the cost of counting activities would be 40% of the total employees' salaries.
40% of $35,000 per employee per year = $14,000 per employee per year.
Total cost of counting activities = $14,000 per employee per year x 4 employees = $56,000 per year.
Hence, the total cost of counting is $56,000 per year.
(5c) - Cost of Inspection:
To calculate the cost of inspection, we need to consider the costs of special testing equipment depreciation and operating cost.
1. Equipment Depreciation: The special testing equipment has a depreciation cost of $500 per year.
2. Operating Cost: The special testing equipment also incurs an operating cost of $1,000 per year.
Hence, the total cost of inspection is $500 + $1,000 = $1,500 per year.
Therefore, the cost of inspection is $1,500 per year.