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 Time
Activity - on Each Activity
Unloading - 25%
Counting - 40%
Inspecting - 35%

Calculate the cost of counting.
a.$54,000
b.$50,500
c.$52,000
d.$56,000

Answer 1

d.$56,000

Step-by-step explanation:

From the text we get that the receiving team has 4 employees, that each one has an average salary of $35,000 per year, we mulitply that by the four employees and get that the receiving team costs $140,000 a year in wages, since there are no other costs in the process of counting, since the forklift is only used for receiving, that is not a counting expense, we just multiply the wages by the percentage of time of each activity, and counting is 40%

So:

140,00x40%= 56,000 dollars

So the cost of counting is 56,000 dollars a year.