Question

The receiving department employs one worker who spends 25% of his time on the receiving activity and 75% of his time on inspecting products. His salary is $40,000. The amount of cost assigned to the receiving activity is a.$34,000. b.$40,000. c.$10,000. d.$30,000. e.None of these.

Answer 1

Answer:

The correct answer is option (C).

Explanation:

According to the scenario, the given data are as follows:

Salary = $40,000

Time spend on Receiving activity = 25%

Time spend on inspecting product = 75%

So, we can calculate the amount of cost assigned to the receiving activity by using following formula:

Cost assigned to the receiving activity = Salary × Time spend on Receiving activity

= $40,000 × 25%

= $40,000 × 0.25

= $10,000

Hence, the amount of cost assigned to the receiving activity is $10,000.