Problem:
Employees are planning next year’s budget for the Accounts Payable Department. A study was done of how the work could be improved and Costs reduced. The conclusion was that the office should operate with a Supervisor and only two clerks, rather than the four clerks employed in the department last year. State-of-the-art equipment was purchased to help two clerks do the work formerly done by four clerks.
Last Year's Expenses Proposed Budget
Salaries $133,000 $96,000
Supplies 4,000 3,800
Repairs and Maintenance 5,000 2,500
Depreciation 3,000 6,000
Telephone 3,500 3,900
Question 1. Calculate the total expenses for the department using last year’s figures.
Question 2. Using last year’s figures, calculate the percentage of total expenses each of the expenses items represents. Round percentages to one decimal Place.
Question 3. using last year’s figures, calculate the cost per invoice processed if 144,500 invoices were handled during the year.
Question 4. Determine the difference in total expenses between last year’s figures and the proposed budget.
Question 5. Calculate the percentage decrease in total expenses if the proposed Budget is used.