Exam 7: Activity-Based Costing and Management

___________________ are incurred to prevent poor quality in the products and services being produced.

Figure 7-1. The receiving department of Owen has three activities: unloading,counting goods,and inspecting.Unloading requires a forklift that is leased for $15,000 per year.The forklift is used only for unloading.The fuel for the forklift is $2,000 per year.Inspection requires special testing equipment that has a depreciation of $500 per year and an operating cost of $1,000 per year.Receiving has four employees who each have an average salary of $35,000 per year.The work distribution matrix for the receiving personnel is as follows: Refer to Figure 7-1.Calculate the cost of counting.