Meadow Logistics, Incorporated (MLI) distributes food purchased in bulk to small retailers. The firm is divided into two divisions: Purchasing and Distribution. Purchasing is responsible for ordering goods from the manufacturer, receiving them, and then moving them to the appropriate location in the warehouse. Distribution is responsible for taking orders from retailers, picking the products from the warehouse for the orders, and packaging the orders for shipment. MLI has a policy of filling every order on the day of the order. If the firm is out of a particular item, it will ship a partial order and complete the order when the item is back in stock. Occasionally, an order will not have to be packaged if the retailer chooses to take delivery at the MLI loading dock. Distribution has 20 employees who are responsible for the activities, and all 20 are trained to handle any of the three tasks. Each of these employees works 40 hours per week for 50 weeks. There is an allowance of 18 percent of the employees' time for training and other administrative tasks. The total costs of distribution for the coming year are estimated to be $900,600. When asked, the manager of Distribution estimated the following times for each of the three activities: • Taking orders: 8 minutes. • Picking orders: 12 minutes. • Packaging orders: 15 minutes. During the year, Distribution received 43,500 orders. Because of out-of-stock events, pickers had to pick 50,500 orders, 41,000 orders were packaged. Required: a. What is the cost per minute for activities in Distribution? Note: Round your answer to 2 decimal places. b. What is the cost of an order that requires all three activities? Note: Round your intermediate calculations and final answer to 2 decimal places. c. How many minutes of unused capacity did Distribution have for the year? d. What was the cost of the unused capacity in Distribution? Note: Round your intermediate calculations to 2 decimal places. Cost per minute
Meadow Logistics, Incorporated (MLI) distributes food purchased in bulk to small retailers. The firm is divided into two divisions: Purchasing and Distribution. Purchasing is responsible for ordering goods from the manufacturer, receiving them, and then moving them to the appropriate location in the warehouse. Distribution is responsible for taking orders from retailers, picking the products from the warehouse for the orders, and packaging the orders for shipment. MLI has a policy of filling every order on the day of the order. If the firm is out of a particular item, it will ship a partial order and complete the order when the item is back in stock. Occasionally, an order will not have to be packaged if the retailer chooses to take delivery at the MLI loading dock. Distribution has 20 employees who are responsible for the activities, and all 20 are trained to handle any of the three tasks. Each of these employees works 40 hours per week for 50 weeks. There is an allowance of 18 percent of the employees' time for training and other administrative tasks. The total costs of distribution for the coming year are estimated to be $900,600. When asked, the manager of Distribution estimated the following times for each of the three activities: • Taking orders: 8 minutes. • Picking orders: 12 minutes. • Packaging orders: 15 minutes. During the year, Distribution received 43,500 orders. Because of out-of-stock events, pickers had to pick 50,500 orders, 41,000 orders were packaged. Required: a. What is the cost per minute for activities in Distribution? Note: Round your answer to 2 decimal places. b. What is the cost of an order that requires all three activities? Note: Round your intermediate calculations and final answer to 2 decimal places. c. How many minutes of unused capacity did Distribution have for the year? d. What was the cost of the unused capacity in Distribution? Note: Round your intermediate calculations to 2 decimal places. Cost per minute
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education