ASSIGNING COSTS TO ACTIVITIES
Norrison Automotive produces brake systems for major automobile producers. The accounts payable department at Norrison has five clerks who process and pay supplier invoices. The total cost of their salaries is $250,000. The work distribution for the activ- ities that they perform is as follows:
|
Activity
|
Percentage of Time on Each Activity
|
|
Comparing source documents
|
25%
|
|
Resolving discrepancies
|
45%
|
|
Processing payment
|
30%
|
Required:
Assign the cost of labor to each of the three activities in the accounts payable department.