Product and Department Budgets Using Activity-Based Approach The following data

Question

Product and Department Budgets
Using Activity-Based Approach
The following data are from the general records of the Loading Department of Bowman Freight Company for November.

Cleaning incoming trucks, 20 minutes.

Obtaining and reviewing shipping documents for loading truck and instructing loaders, 30 minutes.

Loading truck, 1 hour and 30 minutes.

Cleaning shipping dock and storage area after each loading, 10 minutes.

Employees perform both cleaning and loading tasks and are currently averaging $14 per hour in wages and benefits.

The supervisor spends 10 percent of her time overseeing the cleaning activities; 60 percent overseeing various loading activities; and the remainder of her time making general plans and managing the department. Her current salary is $5,000 per month.

Other overhead of the department amounts to $10,000 per month, 20 percent for cleaning and 80 percent for loading.

Prepare an activities budget for cleaning and loading in the Loading Department for November, assuming 20 working days and the loading of an average of 15 trucks per day. (Round your answers to two decimal places.)

Bowman Freight
Loading Department Activity-Based Budget
For the Month of November Activities: Cleaning: Trucks Answerhours Docks Answerhours Total cleaning time Answerhours Loading: Instructions Answerhours Loading trucks Answerhours Total loading time Answerhours Budget: Cleaning: Labor $Answer Overhead Answer Supervision Answer $Answer Loading: Labor Answer Overhead Answer Supervision Answer Answer Total $Answer

Explanation / Answer

Bowman Freight
Loading Department Activity-Based Budget
For the Month of November

Activities Calculation CLEANING Trucks (20days *15 tr * 20) / 60 100 Docks (20 * 15 * 10) /60 50 Total Cleaning Time 150 hours LOADING Intruction Hours (20 * 15* 30) /60 150 Loading Trucks (20* 15 * 1.5) 450 Total LoadingTime 600 Hours BUDGET CLEANING: Labour (150 *14 ) 2100 Overhead (10000 * 20%) 2000 Supervision (5000 * 10%) 500 LOADING: Labour (600 * 14) 8400 Overhead (10000 * 80%) 8000 Supervision (5000 * 60%) 3000 TOTAL $24000

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