Question

In: Accounting

Cieslinski Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company...

Cieslinski Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company has provided the following data to aid in that study: Cieslinski Corporation Tech Support Department Data Inputs Resource Data: Number of employees 12 Average salary per employee $ 43,200 Weeks of employment per year 50 Minutes available per week (40 hours × 60 minutes) 2,400 Practical capacity percentage 80 % Activity Data: Routing Calls Resolving Problems Preparing Change Orders Minutes per unit of the activity 20 26 46 Cost Object Data: Customer G Customer H Customer I Number of calls routed 27 23 7 Number of problems resolved 16 9 9 Number of change orders prepared 0 1 0 On the Customer Cost Analysis report in time-driven activity-based costing, the total cost assigned to Customer I would be closest to: Multiple Choice $168.30 $105.30 $63.00 $0.00

Solutions

Expert Solution

answer is option A $168.30

Weeks of employment per year (a)

50

Minutes available per week (40 hours × 60 minutes) (b)

2400

Practical capacity percentage (c)

80%

Practical capacity per employee (in minutes) (a) × (b) × (c)

96000

Calculate the cost per minute of the resource supplied

Number of employees (a)

12

Average salary per employee (b)

43200

Total cost of resources supplied (a) × (b)

518400

Practical capacity per employee (in minutes) (a)

96000

Number of employees (b)

12

Practical capacity of resources supplied (in minutes) (a) × (b)

1152000

Cost per minute of the resource supplied

$0.45 (518400/1152000)

Calculate the time-driven activity rate

Routing Calls

Resolving Problems

Preparing Change Orders

Minutes per unit of the activity (a)

20

26

46

Cost per minute of the resource supplied (b)

0.45

0.45

0.45

Time-driven activity rate (a) × (b)

9

11.70

20.7

Assign costs to cost objects (Customer I) = (7*9)+(9*11.70)+(0*20.7) = $168.30


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