One Member of the Maintenance Crew Who Earns a Salary

question 7

Multiple Choice

One member of the maintenance crew who earns a salary of $22,000 per year tells you that he spends 70% of his time in the plant, 20% in the administrative offices, and his remaining 10% he can't specify. Another member of the crew who earns a salary of $19,000 per year tells you that she spends 20% of her time in the plant, 60% in the administrative offices and her remaining 20% can't be specified. How much of these workers' salary expense will be charged to the administrative cost pool?

• A) $15,800
• B) $32,800
• C) $17,000
• D) $21,800

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Definitions:

Budgeting

The process of creating a plan to spend your money, allowing you to determine in advance whether you will have enough funds to achieve your financial goals.

Activity Variance

The discrepancy observed between a business's estimated activities costs or resources and the actual expenses or usage.

Net Operating Income

Represents the total profit of a business after operating expenses are subtracted from gross profit.

Personnel Expenses

Costs associated with the compensation and benefits of a company's employees, including wages, salaries, bonuses, and benefits.