Question

Kyle Limited uses forklifts to move materials from the storage area to the production floor. There are five forklifts. They are fully used 20 hours per day (making 8 moves per hour). Kyle Limited works 320 days per year, running two 7-hour shifts per day. Forklift operators work 1,800 hours per year and are paid an annual salary of $56,000. Based on a recent study, each forklift uses 0.45 litres of fuel per move. The cost of fuel is $3.80 per litre. 22. What is the salary budget for the activity of moving materials. Assume that the labour market does not permit the hiring of part-time forklift operators. $980,000 B. $1,008,000 $905,000 $1,135,000 $760,000 A D E. A. B. C. D. E. 23. Calculate the fuel budget for the year for moving materials. $436,090 $228,300 $496,050 $312,100 $437,760

Answer 1

22. Operators needed = (5 × 20 × 320) / 1,800 = 17.78 = 18 operators

Budgeted salaries = 18 × $56,000 = $1,008,000

23. Moves = 5 x 20 x 8 x 320 = 256,000

Fuel cost = 256,000 x 0.45 x 3.80 = 437,760