DBC A consulting firm has recently installed a TDABC system for the Shawnee University Library. The consulting firm identified four major processes or departments for the library: Acquisition, Cataloging. Circulation, and Document Delivery. The Acquisition Department is responsible for acquiring new books and new journal subscriptions. Information for the Acquisition Department is given as follows: Resource Unit Time Costs Activities (Minutes) Driver Books Journals Salaries Computer maintenance $130,000 Selecting or notifying 6 No. of selections 12,000 2,000 10,000 Processing requests 5 No. of requests 6,000 700 Library management system 30,000 Ordering 15 No. of orders 4,000 500 Supplies 10,000 Processing invoices 12 No. of invoices 3,000 250 Total $180,000 Receiving books or journals 11 No. of units received 5,000 500 Periodically, the library is notified of new books and journals by publishers. The Acquisition Department reviews the publishers' list to see if any items are already in the library's collection and also checks the demand for particular books or journals. After this selection process is complete, a list of potential acquisitions is sent to the professors of the university. Professors respond by sending a request for books or journals to the Acquisition Department. These requests are fitered, processed, and transferred to the person responsible for placing orders. When an invoice is received, it is compared with the order and payment is arranged. When the product is received, the product is verified and the requesting person is informed. In the Acquisition Department, there are two full-time librarians and several student employees that provide 4,500 total labor hours (practical capacity). In addition, there are 500 machine hours used in the acquisition process (also at practical capacity). Thus, the total practical capacity of the Acquisition Department is 5,000 hours or 300,000 minutes per year. The library orders 5,000 new books per year and acquires 500 new journal subscriptions. For each of the following requirements, identify the data analytic type (descriptive, diagnostic, predictive, or prescriptive) that will help provide the needed answers. Note: More than one data analytic type might appear in any requirement. Required: 1. Based on interviews and observations, the consulting firm noted that 90 percent of the practical capacity of the Acquisition Department is used for book acquisition and 10 percent for journal acquisition Using this information, calculate the cycle time for book acquisition and the cycle time for journal acquisition. Round your answers to the nearest cent. Books Journals Cycle time The data analytic type is descriptive as it describes what is happening. 2. Calculate the OH or capacity cost rate for the library 2. Calculate the OH or capacity cost rate for the ibrary. Using this rate and the cycle times from Requirement 1, calculate the unit cost of book acquisition and the unit cost of journal acquisition. Round your answers to the nearest cent. Books Unit cost Journals Predict what the unit costs for books and journals would be if computer maintenance cost is budgeted to increase by 50 percent and salaries are budgeted to increase by $25,000. Books Journals Unit cost The unit cost calculation is predictive if the budgeted increases occur 3. For each activity, use the TDABC information to convert the transaction drivers to duration drivers. Using the time values provided for each activity, estimate the cycle time for book acquisition and journal acquisition. Using these cycle time values, calculate the unit cost of book acquisition and the unit cost of journal acquisition. Round your answers to the nearest cent. Cycle time Books Journals this total cost by the number of units Unit cost Explain why the DSC unit cost would be the same as the TDABC unit cost, using the time values provided by TDABC. Since the capacity or OH rate is dividing the same for every unit of time, TDABC obtains the unit cost by simply multiplying the total time used by a product by the capacity rate and then The first two answers use a descriptive analytic type as the answers are describing what is. The last answer is diagnostic is explaining why the two unit costs are the same Dec A consulting firm has recently installed a TDABC system for the Shawnee University Library. The consulting firm identified four major processes or departments for the Sbrary: Acquisition, Cataloging, Circulation, and Document Delivery. The Acquisition Department is responsible for acquiring new books and new journal subscriptions. Information for the Acquisition Department is given as follows: Resource Unit Time Costs Activities (Minutes) Driver Books Journals Salaries Computer maintenance: $130,000 Selecting or notifying 6 No. of selections 12,000 2,000 10,000 Processing requests 5 No. of requests 6,000 700 Library management system 30,000 Ordering 15 No. of orders 4,000 500 10,000 Processing Invoices 12 No. of invoices 3,000 250 $180,000 Receiving books or journals 11 No. of units received 5,000 500 Supplies Total Periodically, the library is notified of new books and journals by publishers. The Acquisition Department reviews the publishers' list to see if any items are already in the Sbrary's collection and also checks the demand for particular books or journals. After this selection process is complete, a list of potential acquisitions is sent to the professors of the university Professors respond by sending a request for books or journals to the Acquisition Department. These requests are filtered, processed, and transferred to the person responsible for placing orders. When an invoice is received, it is compared with the order and payment is arranged. When the product is received, the product is verified and the requesting person is informed In the Acquisition Department, there are two full-time bibrarians and several student employees that provide 4,500 total labor hours (practical capacity). In addition, there are 500 machine hours used in the acquisition process (also at practical capacity). Thus, the total practical capacity of the Acquisition Department is 5,000 hours or 300,000 minutes per year. The library orders 5,000 new books per year and acquires 500 new journal subscriptions. For each of the following requirements, identify the data analytic type (descriptive, diagnostic, predictive, or prescriptive) that will help provide the needed answers. Note: More than one data analytic type might appear in any requirement. Required: 1. Based on interviews and observations, the consulting firm noted that 90 percent of the practical capacity of the Acquisition Department is used for book acquisition and 10 percent for journal acquisition Using this information, calculate the cycle time for book acquisition and the cycle time for journal acquisition, Round your answers to the nearest cent. Books Journals Cycle time The data analytic type is descriptive as it describes what is happening 2. Calculate the OH or capacity cost rate for the library. Using this rate and the cycle times from Requirement 1, calculate the unit cost of book acquisition and the unit cost of journal acquisition. Round your answers to the nearest cent. Unit cost Books Journals Predict what the unit costs for books and journals would be if computer maintenance cost is budgeted to increase by 50 percent and salaries are budgeted to increase by $25,000. Books Journals Unit cost The unit cost calculation is predictive if the budgeted increases occur 3. For each activity, use the TDABC information to convert the transaction drivers to duration drivers. Using the time values provided for each activity, estimate the cycle time for book acquisition and journal acquisition. Using these cycle time values, calculate the unit cost of book acquisition and the unit cost of journal acquisition. Round your answers to the nearest cent. Journals the Cycle time Unit cost Explain why the DBC unit cost would be the same as the TDABC unit cost, using the time values provided by TDABC Since the capacity or OH rate is dividing same for every unt of time, TDABC obtains the unit cost by simply multiplying this total cost by the number of units The first two answers use a descriptive the total time used by a product by the capacity rate and then analytic type as the answers are describing what is. The last answer is diagnostic is explaining why the two unit costs are the same Check My Wi 1. Calculate cycle time by multiplying percentage of practical capacity by total minutes for books and journals. Divide cycle time totals by number of books and journals. See Exhibit 2.6 for identifying data analytic types 2. Calculate Overhead rate as total resource costs by minutes per year. Use this rate and cycle times to calculate unit costs for books and journals. Consider how unit costs will change based upon new data to predict unit costs. Refer to Exhibit 2.6 for identifying data analytic types. 3. Calculate cycle times by multiplying unit time by resource driver for books and journals. Use these cycle times to calculate unit costs for books and journals. Befer to Exhibit 2.6 for identifying data