Using Activity-Based Approach The following data are from the general records of
ID: 2475875 • Letter: U
Question
Using Activity-Based Approach The following data are from the general records of the Loading Department of Bowman Freight Company for November. Cleaning incoming trucks, 20 minutes. Obtaining and reviewing shipping documents for loading truck and instructing loaders, 30 minutes. Loading truck, 1 hour and 30 minutes. Cleaning shipping dock and storage area after each loading, 10 minutes. Employees perform both cleaning and loading tasks and are currently averaging $18 per hour in wages and benefits. The supervisor spends 10 percent of her time overseeing the cleaning activities; 60 percent overseeing various loading activities; and the remainder of her time making general plans and managing the department. Her current salary is $3,000 per month. Other overhead of the department amounts to $10,000 per month, 30 percent for cleaning and 70 percent for loading. Prepare an activities budget for cleaning and loading in the Loading Department for November, assuming 20 working days and the loading of an average of 18 trucks per day. (Round your answers to two decimal places.) Bowman Freight Loading Department Activity-Based Budget For the Month of November Activities: Cleaning: Trucks Answer 4.67 Incorrect hours Docks Answer 7 Incorrect hours Total cleaning time Answer 30 Incorrect hours Loading: Instructions Answer 30 Incorrect hours Loading trucks Answer 90 Incorrect hours Total loading time Answer 120 Incorrect hours Budget: Cleaning: Labor $Answer 2,520 Incorrect Overhead Answer 1,800 Incorrect Supervision Answer 450 Incorrect $Answer 0 Incorrect Loading: Labor Answer 10,080 Incorrect Overhead Answer 7,200 Incorrect Supervision Answer 2,700 Incorrect Answer 0 Incorrect Total $Answer 24,750 Incorrect
Explanation / Answer
Bowman Freight Loading Department:
Activity budget for cleaning and loading:
Total budgeted hours per month = 20 days per month x 18 trucks per day x 2.5 hours per truck = 900 hours
Total budgeted wages and benefits per month = 900 hours x $ 18 per hour = $ 16,200
Total cleaning time : 30 mins or 0.50 hours
Docks : 10 mins or 0.17 hours
Loading: Instructions : 30 mins or 0.50 hours
Loading trucks : 90 mins or 1.5 hours
Total loading time is 120 mins or 2 hours
Cost Activity base Cleaning Loading Others Labor $ 16,200 Time spent $ 3,240 $ 12,960 Supervisor's salary $ 3,000 Time spent $ 300 $ 1,800 $ 900 Other overheads $ 10,000 Given $ 3,000 $ 7,000 Total $ 29,200 $ 6,540 $ 21,760 $ 900Related Questions
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