Athletic Apparel and Sports Supplies are departments of World of Sports. Sheila manages both departments and employs three experts. Falana works full-time at Athletic Apparel and receives $1,000 each month; Carlos was originally hired to work full-time at Sports Supplies, but now works 60% of the time at Athletic Apparel and 40% of the time at Sports Supplies and receives $1,200 each month; Ana works full-time at Sports Supplies and receives $1,100 each month. To compute departmental operating income, how much salary expense would Sheila record? a.$1,580 for Athletic Apparel; $1,720 for Sports Supplies b.$1,720 for Athletic Apparel; $1,580 for Sports Supplies c.$2,200 for Athletic Apparel; $1,100 for Sports Supplies d.$3,300 for World of Sports

Athletic Apparel and Sports Supplies are departments of World of Sports. Sheila manages both departments and employs three experts. Falana works full-time at Athletic Apparel and receives $1,000 each month; Carlos was originally hired to work full-time at Sports Supplies, but now works 60% of the time at Athletic Apparel and 40% of the time at Sports Supplies and receives $1,200 each month; Ana works full-time at Sports Supplies and receives $1,100 each month. To compute departmental operating income, how much salary expense would Sheila record? a.$1,580 for Athletic Apparel; $1,720 for Sports Supplies b.$1,720 for Athletic Apparel; $1,580 for Sports Supplies c.$2,200 for Athletic Apparel; $1,100 for Sports Supplies d.$3,300 for World of Sports

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...

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Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of 25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is 1,100 per year. In addition to the salaries, Elliott spends 27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Classify the resources associated with purchasing as (1) flexible or (2) committed. 2. Compute the total activity availability, and break this into activity usage and unused activity. 3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. 4. (a) Suppose that a large special order will cause an additional 500 purchase orders. What purchasing costs are relevant? By how much will purchasing costs increase if the order is accepted? (b) Suppose that the special order causes 700 additional purchase orders. How will your answer to (a) change?
Jennifer Caratini has recently accepted the job as the foodservice director for Techmar Industries, a corporation with 1,000 employees. As their foodservice director, Jennifer’s role is to operate a company cafeteria, serving 800 to 900 meals per day, as well as an executive dining room, serving 100 to 200 meals per day. All of the meals are provided “free of charge” to the employees of Techmar. One of Jennifer’s first jobs is to prepare a budget for next year’s operations. In addition to the cost of food products and foodservice employees, what other expenses will Techmar incur by providing free meals to its employees? Since employees do not pay for their food directly, what will Jennifer likely use as the “revenue” portion of her budget? How do you think this number should be determined? In addition to her know-how as a foodservice director, what skills will Jennifer likely need as she interacts with the executives at Techmar who must approve her operating budget?
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Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of $25,750 and is capable of processing as many as 6,500 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,500 orders per year. The cost of each PC system is $1,100 per year. In addition to the salaries, Elliott spends $27,560 for forms, postage, and other supplies (assuming 26,000 purchase orders are processed). During the year, 25,350 orders were processed. Required: 1. Which of the resources associated with purchasing can be classified as flexible resources? Forms, Postage and Supplies Which of the resources associated with purchasing can be classified as committed resources? PC system and clerks 2. Compute the total activity availability, and break this into activity usage and unused activity. Activity availability: fill in the blank 3 purchase orders Activity usage: fill in the blank…
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