Question

Required a. What is the cost per minute for activities in Distribution? (Round your answer to 2 declmal places.) b. What is the cost of an order that requires all three activities? (Round your Intermediate calculations an c. How many minutes of unused capacity did Distribution have for the year? d. Wbat was the costof the unused capacity in Distribution? (Round your intermediate calculations to 2 decima References eBook & Resources Worksheet culity 2 Medium споск esc 20 FI 8. 1000 points Kim Distribution Services (KDS) distributes food purchased In bulk to smal retalers. The fem is divided into two divisions: Purchasing and Distribution. Purchasing is responsible for ordering goods from the cation in the warehouse. Distruo nansonsble fr taki gorers one ale spong om te ware o a·for the roon. s rer, reweg them, and een mo ng them to the appre rate and packaging the orders for shipment. KDS has a policy of iing every order on the day of the order. If the rm is out of a particular hem, it will ship a partial order and complete the order when the bem is back in stock. Occasionally, an order will not have to be packaged f the retaler chooses to take delivery at the KDS loading dock Distribution has 22 employees who are responsible for the activities, and all 22 are trained to handle any of the throe tasks. Each of these employees works 40 hours per week for 50 weeks. There is an allowance $835,000. When asked, the manager of Distribution estimated of 15 of the employoes' time for training and other administrative tasks. The totsl cots of distribution tor the coming year aro estrmated to be the following times for each of the three activities: Taking orders: 17 minutes Picking orders: 21 minutes Packaging orders: 34 minutes During the year, the Distribution received 28,500 orders. Because of out-of-stock events, pickers had to pick 33.500 onders. 29,100 orders were packaged α, what is the cost per minte for activees in Dstbution? (Round your answer to 2 decimal places.) intermedlate calculations and final answers to 2 decimal places) b. What is the cost of an order that requires al three activities? (Round your i 8

Answer 1

1

Cost per minute = $0.37

Working notes for the answer

Total cost in Distribution = $835000

Total minutes available = 2,244,000

Cost per minute = $0.40 (= $835000÷ 2,244000)

calculation of the Total minutes available

22 employees × 50 weeks × 40 hours per week × 0.85 × 60 minutes per hour

=22*50*40*0.85*60

=2,244,000

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2

What is the cost of an order that requires all three activities?

Answer: the cost of an order =$26.64

Working notes for the answer

	Taking Orders	+	Picking Orders	+	Packaging Orders	=	Total
Minutes per order	17	+	21	+	34		72
Multiplied by
Cost per minute							0.37
Total costs							26.64

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C)

How many minutes of unused capacity did Distribution have for the year?

Answer:

Unused minutes =66,600 minutes

Working notes for the answer

	Taking Orders	Picking Orders	Packaging Orders	Total
Total Minutes				2244000
Minutes per order	17	21	34
Multiplied by
Number of order	28500	33500	29100
Minuted used	484500	703500	989400	2177400
Unused Minutes				66,600

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d)

$24,642 (= 66,600 minutes × $0.37 per minute)