Grayson, SA The Actual Prices Paid Per Unit of Each Activity Driver

question 12

Essay

Grayson, SA., has developed ideal standards for four activities: labour, materials, inspection, and receiving.
Information is as follows: $\begin{array}{llccc}\text { Activity } & \text { Activity Driver } & \text { SQ } & \text { AQ } & \text { SP } \\\text { Labour } & \text { Hours } & 1,000 & 1,100 & £ 16 \\\text { Materials } & \text { kgs } & 4,000 & 5,000 & £ 24\\\text { Inspection } & \text { Inspection hours } & -0- & 750 & £ 11 \\\text { Receiving } & \text { Orders } & 60 & 75 & £ 400\end{array}$ The actual prices paid per unit of each activity driver were equal to the standard prices.
Required:

Complete the following cost report:


$$\begin{array} { l c c c } \text { Activity } &{ \text { Value-Added } } &\text { Nonvalue-Added }& { \text { Actual } } \\\text { Labour } & £ ? & £ ? & £ ? \\\text { Materials } & ? & ? & ? \\\text { Inspection } & ? & ? & ? \\\text { Receiving } & \underline{ ?}& \underline{?} & \underline{ ?} \\\text { Totals } & £ ? & £ ?& £ ?\end{array}$$

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Definitions:

Reserve Requirement

The minimum amount of reserves that banks must hold against deposits, as mandated by central banking authorities to ensure bank liquidity.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, financial regulation, and stability.

Excess Reserve

Funds that banks hold over and above the required minimum reserves mandated by central banking authorities.

Money Supply

The aggregate of all money, such as cash, deposits in banks, and liquid assets, that is present within an economy at a certain point in time.