The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year. Calculate the activity rate per change order.
A)$4 per change order
B)$10 per change order
C)$40 per change order
D)$15 per change order

Question

Quizplus · Accepted Answer

The activity rate per change order can be calculated as the total cost of the process divided by the total number of change orders.
Total cost for the four process engineers = 4 x $60,000 = $240,000
Number of change orders produced = 5,250
Activity rate per change order = $240,000 / 5,250 = $45.71
Rounding up to the nearest dollar, the activity rate per change order is $46. Therefore, the closest answer is C, $40 per change order.

The Sandoval Company Has Four Process Engineers That Are Each