Athens Company is conducting a time-driven activity-based costing study in its Engineering Department. To aid the study, the company provided the following data regarding its Engineering Department and the customers served by the department:

Number of employees	10
Average salary per employee	$ 86,000
Weeks of employment per year	52
Hours worked per week	40
Practical capacity percentage	85%

	New Product Design	Engineering Change Orders	Product Testing
Hours per unit of the activity	40	20	8

	Customer A	Customer B	Customer C	All Customers
Number of new products designed	4	3	5	190
Number of engineering change orders	7	4	4	260
Number of products tested	7	3	5	170

Required:

1. Using the customer cost analysis as demonstrated in Exhibit 7A-2, compute the following:

a. The cost per hour of the resource supplied in the Engineering Department.

b. The time-driven activity rate per hour for each of Athens' three activities.

c. The total engineering costs consumed by Customer A, Customer B, and Customer C.

2. Using the capacity analysis as demonstrated in Exhibit 7A-3, compute the following:

a. The used capacity in hours.

b. The unused capacity in hours.

c. The unused capacity in number of employees.

d. The impact on expenses of matching capacity with demand.

3. Assume that Athens is considering expanding its business such that the estimated number of new products designed would increase to 260, the number of engineering change orders would jump to 330, and the number of products tested would rise to 250. Using these revised figures, calculate the following:

a. The used capacity in hours.

b. The unused capacity in hours.

c. The unused capacity in number of employees.

d. The impact on expenses of matching capacity with demand.