Figure 3-3
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
-Refer to Figure 3-3. 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 total salary cost for the engineers is $240,000 ($60,000 x 4). The activity rate per change order is calculated by dividing the total salary cost by the total number of design changes: $240,000 / 5,250 = $45.71, which rounds to $40 per change order.

Figure 3-3 The Sandoval Company Has Four Process Engineers That Are Each