Midwest Office Products Case Study

CASE STUDY # 1

Accounting ACC 6140

Midwest Office Products

1. Based on the interviews and data in the case, estimate:

1. The cost of processing cartons through the facility

|Personnel Expense |$2,570,000 |

|Truck Driver Compensation |($250,000) |

|Warehouse expenses (excluding personnel) |$2,000,000 |

| |$4,320,000 |

|54 per carton | |

2. The cost of entering electronic and manual customer orders

|Order Entry Expense |840,000 |

|16 operators - 52,500 per operator | |

|1500 per year of work = 34.67 per hour |35.00 per hour |

|Electronic order = .1 hours |3.50 per order |

|Manual order = |8.75 per order + 2.63 per line item |

|9 min manual info (.15) $5.25 per order | |

| | |

|4.5 min. each line (.075) $2.63 | |

| | |

|6 min. verification (.10) $3.50 per order...