Question

Weisgarber Corporation is conducting a time-driven activity-based costing study in its Customer Service Department. The company has provided the following data to aid in that study:

Weisgarber Corporation
Customer Service Department
Data Inputs
Resource Data:
Number of employees		24
Average salary per employee	$	37,710
Weeks of employment per year		50
Minutes available per week (40 hours × 60 minutes)		2,400
Practical capacity percentage		90	%

Activity Data:	Processing Orders	Resolving Queries	Processing Credit Reviews
Minutes per unit of the activity	21	27	53

Cost Object Data:	Customer G	All Customers
Number of orders processed	36	49,320
Number of queries resolved	20	23,620
Number of credit reviews processed	4	2,260

Required:

a. Prepare a time-driven activity-based costing Customer Cost Analysis report that determines the total Customer Service Department cost assigned to Customer G.

b. Prepare a time-driven activity-based costing Capacity Analysis report for the Customer Service Department that determines the impact on expenses of matching capacity with demand.

Required A Required B Prepare a time-driven activity-based costing Customer Cost Analysis report that determines the total Customer Service Department cost assigned to Customer G. (Round "cost per minute" and "activity rate" to 2 decimal places.) Weisgarber Corporation Customer Service Department Customer Cost Analysis Step 1: Calculate the cost per minute of the resource supplied Number of employees Average salary per employee Total cost of resources supplied Practical capacity per employee Number of employees Practical capacity of resources supplied Cost per minute of the resource supplied Step 2: Calculate the time-driven activity rate rocessing Orders Processing soving es Reviews C Minutes per unit of the activity Cost per minute of the resource supplied Time-driven activity rate Step 3: Assign costs to cost objects Number of orders processed Time-driven activity rate Processing Orders costs assigned Number of queries resolved (a) Time-driven activity rate (b) Resolving Queries costs assigned Number of credit reviews processed Time-driven activity rate Processing Credit Reviews costs assigned

Answer 1

Weisgarber Corporation
Customer Service Department
Customer Cost Analysis
Step 1: Calculate the cost per minute of the resource supplied
Number of employees	24
Average salary per employee	37710
Total cost of resources supplied	905040
Practical capacity per employee (50 x 2400 x 90%)	108000
Number of employees	24
Practical capacity of resources supplied	2592000
Cost per minute of the resource supplied	0.35
Step 2: Calculate the time-driven activity rate
	Processing Orders	Resolving Queries	Processing Credit Reviews
Minutes per unit of the activity	21	27	53
Cost per minute of the resource supplied	0.35	0.35	0.35
Time-driven activity rate	7.35	9.45	18.55
Step 3: Assign costs to cost objects
Number of orders processed	36
Time-driven activity rate	7.35
Processing Orders costs assigned	265
Number of queries resolved (a)	20
Time-driven activity rate (b)	9.45
Resolving Queries costs assigned	189
Number of credit reviews processed	4
Time-driven activity rate	18.55
Processing Credit Reviews costs assigned	74