ABC Garber Company uses a traditional ABC system to assign $600,000 of committed resource costs for customer service on the basis of the following information gathered from interviews with customer service personnel:

Activity	Time Percentage	Estimated Cost Driver Quantity
Handle customer orders	75%	8,000	customer orders
Process customer complaints	10%	400	customer complaints
Perform customer credit checks	15%	450	credit checks
	100%

(b) Suppose instead that Garber uses TDABC to assign the $600,000 of committed resource costs to the three activities. Compute the time-driven activity cost driver rates assuming 10,000 hours of useful work and the unit-time estimates that follow. Note: Round answers to two decimal points. First calculate the capacity cost rate. $Answer per hour

Activity	Unit Time (Hours)	Activity Cost Driver Rate
Handle customer orders	0.75		per customer order
Process customer complaints	3.50		per customer complaint
Perform customer credit checks	3.00		per credit check

(c) Suppose that the quantities of activities this period are 8,000 customer orders, 400 customer complaints, and 450 credit checks. Using the information and activity cost driver rates developed in part (b), determine the cost assigned to each of the activities and the estimated hours of unused capacity as well as the associated cost. Think about what actions might managers take after evaluating such information?

Activity	Unit Time (Hours)	Quantity of Activities	Total Hours	Cost Assigned
Handle customer orders	0.75
Process customer complaints	3.5
Perform customer credit checks	3
Total

Percentage of practical capacity used = ________% Note: Round the percentage to two decimal points (i.e. show 14.445% as 14.45%). Unused capacity = __________ hours Unassigned cost = $_______