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a.
Percent of
Total
Activity Cost Process
Preparing materials request
Requesting, receiving, and selecting vendor bids
Preparing purchase order
Preparing receiving ticket
Matching M/R, R/T, and invoice
Correcting reconciliation differences
Preparing and delivering vendor payment
Total
The two activities that are good candidates for improvement are:
b.
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
c.
Activity Cost Activity Cost Activity Cost
Prior to After Savings
Activity Improvement Improvement (Cost)
Preparing materials request
Requesting, receiving, and selecting vendor bids
Preparing purchase order
Preparing receiving ticket
Matching M/R, R/T, and invoice
Correcting reconciliation differences
Preparing and delivering vendor payment
Total
d.
Average process cost per payment:
Total Activity Cost / Number of Payments = Average Cost per Payment
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Exercise 27(12)-23
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Exercise 27(12)-23
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