In: Accounting
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
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