Solved

Figure 11-8. Booth Inc.uses Three Delivery Trucks to Transport Finished Parts from Parts

Question 11

Essay

Figure 11-8.
Booth Inc.uses three delivery trucks to transport finished parts from its plant to the plants of its customers.The delivery trucks are obtained through a five-year operating lease that costs $12,000 per year per truck.Booth employs 6 drivers who receive an average salary of $36,000 per year,including benefits.Parts are placed in boxes and placed in the trucks.Each truck holds 20 boxes.The average round-trip distance for a delivery is 40 miles.The boxes are retained by the customers.Each box costs $2.00.Fuel for the trucks costs $1.80 per gallon.A gallon of gas is used every 20 miles.A driver can travel 160 miles in an eight-hour shift.Each driver works 40 hours per week and 50 weeks per year.
Refer to Figure 11-8.Assume that the company uses only 90 percent of the activity capacity.The actual costs incurred at this level were:
Figure 11-8. Booth Inc.uses three delivery trucks to transport finished parts from its plant to the plants of its customers.The delivery trucks are obtained through a five-year operating lease that costs $12,000 per year per truck.Booth employs 6 drivers who receive an average salary of $36,000 per year,including benefits.Parts are placed in boxes and placed in the trucks.Each truck holds 20 boxes.The average round-trip distance for a delivery is 40 miles.The boxes are retained by the customers.Each box costs $2.00.Fuel for the trucks costs $1.80 per gallon.A gallon of gas is used every 20 miles.A driver can travel 160 miles in an eight-hour shift.Each driver works 40 hours per week and 50 weeks per year. Refer to Figure 11-8.Assume that the company uses only 90 percent of the activity capacity.The actual costs incurred at this level were: Figure 11-8. Booth Inc.uses three delivery trucks to transport finished parts from its plant to the plants of its customers.The delivery trucks are obtained through a five-year operating lease that costs $12,000 per year per truck.Booth employs 6 drivers who receive an average salary of $36,000 per year,including benefits.Parts are placed in boxes and placed in the trucks.Each truck holds 20 boxes.The average round-trip distance for a delivery is 40 miles.The boxes are retained by the customers.Each box costs $2.00.Fuel for the trucks costs $1.80 per gallon.A gallon of gas is used every 20 miles.A driver can travel 160 miles in an eight-hour shift.Each driver works 40 hours per week and 50 weeks per year. Refer to Figure 11-8.Assume that the company uses only 90 percent of the activity capacity.The actual costs incurred at this level were:

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q2: In an activity framework, controlling costs is

Q7: In a standard cost system,variable overhead is

Q8: In an activity framework controlling costs translates

Q10: An activity-based budgetary approach can be used

Q14: Figure 11-4. Kris Company calculates its predetermined

Q15: The following costs were developed for one

Q42: A difference between the actual amount and

Q110: Although general responsibility for the volume variance

Q158: _ are capacity costs acquired in advance

Q158: A budget prepared for a particular level