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Category > Management Posted 28 Oct 2017 My Price 7.00

Fermi Company

Exercise 11-40  Activity-Based Budgeting

Fermi 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.       6 workers capable of completing 25,000 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 $27,000 for each worker

b.       Supplies (paper, grease markers, small tools, rags) expected to cost $0.80 per receiving order

c.        Workbenches, dollies, computers, etc.; depreciation $14,400 per year

d.       Space for the receiving dock, utilities; $9,800 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. (Note: Round to the nearest cent.)

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Maurice Tutor
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Status NEW Posted 28 Oct 2017 08:10 PM My Price 7.00

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