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 $18 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 $4,500 per month. Other overhead of the department amounts to 59,000 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 14 trucks per day. (Round answers two decimal places.

Explanation / Answer

Cleaning: Trucks 93.33 Docks 140.00 Total Cleaning Time: 233.33 Loading Instructions 140.00 Loading trucks 420.00 Total loading time 560.00 Budget Cleaning: Labour 4200.00 Overhead 1800.00 Supervision 450.00 6450 Loading: Labour 10080.00 Overhead 7200.00 Supervision 2700.00 19980

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