A Local Post Office Sorts Letters by Postal Code $\begin{array}{lr}\text { Direct labour } & \$ 12,000 \\\text { Overhead } & 8,000 \\\text { Total } & \$ 20,000 \\\end{array}$

question 132

Essay

A local post office sorts letters by postal code.During the month of July,200,000 letters were sorted.The cost of sorting includes the following:
$\begin{array}{lr}\text { Direct labour } & \$ 12,000 \\\text { Overhead } & 8,000 \\\text { Total } & \$ 20,000 \\\end{array}$
a.Explain why process costing is appropriate for this operation.
b.Calculate the cost per letter for this operation.
c.There are no direct materials used for the sorting operation.Is the absence of direct materials typical of services? If not,provide examples of services that use direct materials.

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Definitions:

Social Status

The position or rank of a person or group within the societal hierarchy, determined by factors like wealth, occupation, education, and family background.

Self-Acceptance

An individual's satisfaction or happiness with oneself; embracing one's own strengths and weaknesses.

Hedonic Treadmill

A theory suggesting that people consistently return to a baseline level of happiness regardless of what happens to them, making it difficult to achieve lasting increases in happiness.