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A Local Post Office Sorts Letters by Postal Code  Direct labour $12,000 Overhead 8,000 Total $20,000\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:
 Direct labour $12,000 Overhead 8,000 Total $20,000\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.


Definitions:

Binding Site

A specific region on a protein or enzyme where a particular molecule, such as a substrate, hormone, or drug, can form a stable complex, initiating a biological action.

Secondary Active Transport

involves the movement of substances across a cell membrane utilizing energy indirectly from the electrochemical gradient established by primary active transport.

Concentration Gradient

A difference in the concentration of a substance across a distance, leading to substances moving from an area of high concentration to one of lower concentration.

Carrier Molecule

A protein that facilitates the transport of specific substances across a cell membrane by changing its shape.

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