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Assigning Costs to Activities, Resource Drivers The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $3,600 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has a depreciation of $1,200 per year and an operating cost of $750. Receiving has three employees who have an average salary of $50,000 per year. The work distribution matrix for the receiving personnel is as follows: No other resources are used for these activities. Required: 1. Calculate the cost of each activity. 2. Conceptual Connection: Explain the two methods used to assign costs to activities.

Assigning Costs to Activities, Resource Drivers

The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $3,600 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has a depreciation of $1,200 per year and an operating cost of $750. Receiving has three employees who have an average salary of $50,000 per year. The work distribution matrix for the receiving personnel is as follows:

No other resources are used for these activities.

Required:

1. Calculate the cost of each activity.

2. Conceptual Connection: Explain the two methods used to assign costs to activities.

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