Question

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:Percentage of TimeActivity on Each ActivityUnloading 25%Counting 40%Inspecting 35%Calculate the cost of counting.a.$54,000b.$50,500c.$52,000d.$56,000

Answer 1

Answer:

d.$56,000

Explanation:

For computing the cost of counting, first we have to calculate the total salary amount which is shown below:

Total Salary = Average salary × number of employees

                    = $35,000 × 4 employees

                    = $140,000

Now the cost of counting would be equal to

= Total salary × counting percentage

= $140,000 × 0%

= $56,000