Question

Saratoga Company manufactures jobs to customer specifications. The company is conducting a time-driven activity-based costing study in its Purchasing Department to better understand how Purchasing Department labor costs are consumed by individual jobs. To aid the study, the company provided the following data regarding its Purchasing Department and three of its many jobs:

Number of employees		20
Average salary per employee	$	25,000
Weeks of employment per year		52
Hours worked per week		40
Practical capacity percentage		85	%
	Requisition Processing			Bid Evaluation	Inspection
Minutes per unit of the activity	15			45	30
	Job X			Job Y	Job Z
Number of requisitions processed	8			5	4
Number of bid evaluations	4			3	5
Number of inspections	7			3	7

Required:

1. Calculate the cost per minute of the resource supplied in the Purchasing Department.

2.Calculate the time-driven activity rate for each of Saratoga’s three activities. (Round your intermediate calculations and final answers to 2 decimal places.)

	Requisition Processing Bid Evaluation Inspection Time-driven activity rate

3. Calculate the total purchasing labor costs assigned to Job X, Job Y, and Job Z.

Job X	Job Y	Job Z
Total purchasing labor costs assigned to jobs

Answer 1

1 1) 2 Particulars 3 Total salary 4 no. of minutes worked 5 Cost per minute of resources supplied 6 72) Amounts($) 500000 2121600 0.24 8 A Minutes (A*0.24) Amount ($) 3.6 45 10.8 7.2 9 Activity 10 Requisition processing 11 Bid evaluations 12 Inspections 13 14 3) 15 16 Particulars 17 Job X 18 Joby 19 Job z 20 Total Requisition processing Bid evaluations Inpections Activity(3.6) Amount ($) Activity(10.8) Amount ($) Activity(7.2) Amount ($) 8 28.8 43.2 7 50.4 5 18 32.4) 21.61 4 14.4 71 50.4 17 61.2 129.6 122.4 Blow 54 7

А B C D E 1 1) 2 Particulars 3 Total salary 4 no. of minutes worked 5 Cost per minute of resources supplied Amounts($) =25000*20 =20*52*40*60*0.85 1=B3/B4 7 2) Α Minutes 15 45 (A*0.24) Amount ($) =B10*0.24 =B11*0.24 =B12*0.24 30 9 Activity 10 Requisition processing 11 Bid evaluations 12 Inspections 13 14 3) 15 16 Particulars 17 Job X 18 Joby 19 Job z 20 Total Requisition processing Bid evaluations Inpections Activity(3.6) Amount ($) Activity(10.8) Amount ($) Activity(7.2) Amount ($) I=B17*3.6 14 =D17*10.8 7 =F17*7.2 =B18*3.6 3 D18*10.8 |3 . =F18*7.2 =B19*3.6 I=D19*10.8 7 =F19*7.2 =B17+B18+B19 =B20*3.6 1=D17+D18+D19 =D20*10.8 |=F17+F18+F19 =F20*7.2