Assume That the Accounts Payable Department of a Company Has

Essay

Assume that the accounts payable department of a company has five clerks; each one is paid $25,000 per year ($125,000 total clerical salaries). On average, the clerks spend:
20% of time on processing payments
30% of time matching invoices, receiving documents, and billing statement
50% of time correcting errors in the various documents
In addition, long distance telephone costs of $1,700 are directly traced to the activity "correcting errors."
A. Assign the clerical salary cost to each of the three activities.
B. Calculate the total cost of the "correcting errors" activity.