Refer to the interview in Exercise 4.17 (especially to Question 4 and 7). The general ledger reveals the following annual costs:                           Supervisor’s salary                                      $ 64, 600                           Clerical salaries                                              210,000                           Computers, desks, and printers                        32,000                           Computer supplies                                             7,200                           Telephone expenses                                           4,000                           ATM                                                         $ 1,250,000 All non labor resources, other than the ATM, are spread evenly among the eight credit department employees (in terms of assignment and usage). Credit department employees have no contact with ATMs. Printers and desks are used in the same ratio as computers by the various activities.   Required: Determine the cost of all primary and secondary activities. Assign the cost of secondary activities to the primary activities.

Question

Refer to the interview in Exercise 4.17 (especially to Question 4 and 7). The general ledger reveals the following annual costs:

                          Supervisor’s salary                                      $ 64, 600

                          Clerical salaries                                              210,000

                          Computers, desks, and printers                        32,000

                          Computer supplies                                             7,200

                          Telephone expenses                                           4,000

                          ATM                                                         $ 1,250,000

All non labor resources, other than the ATM, are spread evenly among the eight credit department employees (in terms of assignment and usage). Credit department employees have no contact with ATMs. Printers and desks are used in the same ratio as computers by the various activities.

 

Required:

  1. Determine the cost of all primary and secondary activities.
  2. Assign the cost of secondary activities to the primary activities.

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