20 Feb Exercise 11-40 Activity-Based BudgetingFermi Compa
Exercise 11-40 Activity-Based BudgetingFermi Company decided to look more closely at the materials receiving activity in its factory. The driver for receiving is the number of receiving orders. The following information for a year was collected:Demand for receiving orders: 130,000 Resources needed:a. 6 workers capable of completing 25,000 receiving orders per year. (The completion of a receiving order requires unloading the materials onto the receiving dock, checking the receiving order against the purchase order and invoice, and carrying the materials to the materials storeroom.) Salary is $27,000 for each workerb. Supplies (paper, grease markers, small tools, rags) expected to cost $0.80 per receiving orderc. Workbenches, dollies, computers, etc.; depreciation $14,400 per yeard. Space for the receiving dock, utilities; $9,800 per yearRequired:1. Prepare a static budget for the receiving activity for the year.2. Calculate the cost per receiving order based on annual demand for receiving orders. (Note: Round to the nearest cent.)
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