Process Activity Analysis The procurement process for Jarom Wholesale Company includes a series of activities that transforms a materials requisition into a vendor payment. The process begins with a request for materials. The requesting department prepares and sends a materials request form to the Purchasing Department. The Purchasing Department then places a request for a quote to vendors. Vendors prepare bids in response to the request for a quote. A vendor is selected based on the lowest bid. A purchase order to the low-bid vendor is prepared. The vendor delivers the materials to the company, whereupon a receiving ticket is prepared. Payment to the vendor is authorized if the materials request form, receiving ticket, and vendor invoice are in agreement. These three documents fail to agree 40% of the time, initiating effort to reconcile the differences. Once the three documents agree, a payment is made. The process can be diagrammed as follows: An activity analysis indicated the following activity costs with this process: Preparing materials request $32,000 Requesting, receiving, and selecting vendor bids 92,000 Preparing purchase order 20,000 Preparing receiving ticket 24,000 Matching M/R, R/T, and invoice 52,000 Correcting reconciliation differences 148,000 Preparing and delivering vendor payment 32,000     Total process activity cost $400,000   On average, the process handles 10,000 individual requests for materials that result in 10,000 individual payments to vendors. Management proposes to improve this process in two ways. First, the Purchasing Department will develop a preapproved vendor list for which orders can be placed without a request for quote. It is expected that this will reduce the cost of requesting and receiving vendor bids by 75%. Second, additional training and standardization will be provided to reduce errors introduced into the materials requisition form and receiving tickets. It is expected that this will reduce the number of reconciliation differences from 40% to 10%, over an average of 10,000 payments. a.  Develop a table showing the percent of individual activity cost to the total process cost. Jarom Wholesale Company Individual activity cost to the total process cost   Procurement Activities Activity Cost Percent of Total Process Cost Preparing materials request $fill in the blank 2d7249017026ffe_1 fill in the blank 2d7249017026ffe_2% Requesting, receiving, and selecting vendor bids fill in the blank 2d7249017026ffe_3 fill in the blank 2d7249017026ffe_4% Preparing purchase order fill in the blank 2d7249017026ffe_5 fill in the blank 2d7249017026ffe_6% Preparing receiving ticket fill in the blank 2d7249017026ffe_7 fill in the blank 2d7249017026ffe_8% Matching M/R, R/T, and invoice fill in the blank 2d7249017026ffe_9 fill in the blank 2d7249017026ffe_10% Correcting reconciliation differences fill in the blank 2d7249017026ffe_11 fill in the blank 2d7249017026ffe_12% Preparing and delivering vendor payment fill in the blank 2d7249017026ffe_13 fill in the blank 2d7249017026ffe_14% Total process activity cost $fill in the blank 2d7249017026ffe_15 fill in the blank 2d7249017026ffe_16% b.  Determine the average total process cost per vendor payment, assuming 10,000 payments. $fill in the blank e5cb420a2fc604b_1 per vendor payment c.  Prepare a table showing the improvements in the activity costs as a result of the changes proposed by management. If an amount is zero, enter a "0". Jarom Wholesale Company Changes in activity costs   Procurement Activities Activity Cost Prior to Improvement Activity Cost After Improvement Activity Cost Savings Preparing materials request $fill in the blank 2c8365fd200002c_1 $fill in the blank 2c8365fd200002c_2 $fill in the blank 2c8365fd200002c_3 Requesting, receiving, and selecting vendor bids fill in the blank 2c8365fd200002c_4 fill in the blank 2c8365fd200002c_5 fill in the blank 2c8365fd200002c_6 Preparing purchase order fill in the blank 2c8365fd200002c_7 fill in the blank 2c8365fd200002c_8 fill in the blank 2c8365fd200002c_9 Preparing receiving ticket fill in the blank 2c8365fd200002c_10 fill in the blank 2c8365fd200002c_11 fill in the blank 2c8365fd200002c_12 Matching M/R, R/T, and invoice fill in the blank 2c8365fd200002c_13 fill in the blank 2c8365fd200002c_14 fill in the blank 2c8365fd200002c_15 Correcting reconciliation differences fill in the blank 2c8365fd200002c_16 fill in the blank 2c8365fd200002c_17 fill in the blank 2c8365fd200002c_18 Preparing and delivering vendor payment fill in the blank 2c8365fd200002c_19 fill in the blank 2c8365fd200002c_20 fill in the blank 2c8365fd200002c_21 Total process activity cost $fill in the blank 2c8365fd200002c_22 $fill in the blank 2c8365fd200002c_23 $fill in the blank 2c8365fd200002c_24