Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

plz show how you get the answer. Stahl Company is conducting a time-driven activity-based costing study in its Shipping Department. To aid the study, the

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

plz show how you get the answer.

Stahl Company is conducting a time-driven activity-based costing study in its Shipping Department. To aid the study, the company provided the following data regarding its Shipping Department and the customers served by the department: Number of employees Average salary per employee Weeks of employment per year Hours worked per week Practical capacity percentage 23 $37,000 52 40 80% Line-Item Picking 5 Packaging 15 Loading Deliveries 30 Minutes per unit of the activity Number of line itens picked Number of boxes packaged Number of deliveries loaded Customer L 215 33 6 Customer M 115 13 2 Customer N 65 15 10 All Customers 245,000 24, 800 10,900 Required: 1. Using the customer cost analysis as demonstrated in Exhibit 7A-2, compute the following: a. The cost per minute of the resource supplied in the Shipping Department. b. The time-driven activity rate for each of Stahl's three activities. c.The total labor costs consumed by Customer L, Customer M, and Customer N. 2. Using the capacity analysis as demonstrated in Exhibit 7A-3, compute the following: a. The used capacity in minutes. b. The unused capacity in minutes. c. The unused capacity in number of employees. d. The impact on expenses of matching capacity with demand. EXHIBIT 7A-2 Ridley Company: Customer Cost Analysis D 1 UN Ridley Company Customer Service Department Customer Cost Analysis 5 Step 1: Calculate the cost per minute of the resource supplied 6 30 $ 29,952 $ 898,560 7 Customer Service Department: 8 Number of employees (a) 9 Average salary per employee (b) 10 Total cost of resources supplied (a) (b) 11 12 Practical capacity per employee (in minutes) (a) 13 Number of employees (b) 14 Practical capacity of resources supplied (in minutes) (a) (b) 99,840 30 2,995, 200 15 16 Cost per minute of the resource supplied $ 0.30 17 18 Step 2: Calculate the time-driven activity rate 19 Minutes per unit of the activity (a) 20 Cost per minute of the resource supplied (b) 21 Time-driven activity rate (a) (b) Order Query Credit processing resolution reviews 10 30 40 $ 0.30 $ 0.30 $ 0.30 $ 3.00 $ 9.00 $12.00 22 23 Step 3: Assign costs to cost objects 24 Number of orders processed (a) 25 Time-driven activity rate (b) 26 Order processing costs assigned (a) (b) 27 28 Number of customer queries (a) 29 Time-driven activity rate (b) 30 Query resolution costs assigned (a) (b) Customer A Customer B Customer 30 18 7 $ 3.00 $ 3.00 $ 3.00 $ 90.00 $ 54.00 $ 21.00 10 00 $ $ 17 9.00 $ 153.00 $ 9.00 $ 90.00 $ 9.00 72.00 31 32 Number of credit checks (a) 33 Time-driven activity rate (b) 34 Credit review costs assigned (a) (b) $ $ 1 12.00 $ 12.00 $ 1 12.00 $ 12.00 $ 1 12.00 12.00 35 $ 255.00 $ 156.00 $ 105.00 37 36 Total customer service costs assigned Exhibit 7A-1 Exhibit 7A-2 Exhibi EXHIBIT 7A-3 Ridley Company: Capacity Analysis A B D E 1 2 Ridley Company Customer Service Department Capacity Analysis 3 4 Order Query Credit processing resolution reviews Total 200,000 4,500 8.900 10 30 40 2,000,000 135,000 356,000 2,491,000 2,995,200 2,491,000 504,200 5 Step 1: Calculate the used capacity in minutes 6 Customer demand for each activity (a) 7 Customer service minutes required per unit of each activity (b) 8 Customer service minutes used to meet demand (a) (b) 9 10 Step 2: Calculate the unused capacity in minutes 11 Total customer service minutes available to meet demand (a) 12 Total customer service minutes used to meet demand (b) 13 Unused capacity in minutes (a) -(b) 14 15 Step 3: Calculate the unused capacity in number of employees 16 Unused capacity in minutes (a) 17 Practical capacity per employee (in minutes) (b) 18 Unused capacity in number of employees (a) (b) 19 20 Step 4: Calculate the financial impact of matching capacity with demand 21 Potential adjustment in number of employees (rounded) (a) 22 Average salary per employee (b) 23 Impact on expenses of matching capacity with demand (a) (b) 504,200 99,840 5.05 (5.00) $ 29,952 $(149,760) 24 25 Note: Cell B21 uses the formula =if(B18>0, rounddown(-818,0), roundup(-818,0)) HM Exhibit 7A-2 Exhibit 7A-3 Exhill 26 Exhibit 7A-4 Complete this question by entering your answers in the tabs below. Required 1 Required 2 1. Compute the following: a. The cost per minute of the resource supplied in the Shipping Department. b. The time-driven activity rate for each of Stahl's three activities. C. The total labor costs consumed by Customer L, Customer M, and Customer N. (For all requirements, round your intermediate calculations and final answers to 2 decimal places.) Show less a. Cost per minute of the resource supplied b. Time-driven activity rate: Line-item picking Packaging Loading Deliveries c. Total shipping labor costs assigned to: Customer L Customer M Customer N Required 1 Required 2 2. Compute the following: a. The used capacity in minutes. b. The unused capacity in minutes. c. The unused capacity in number of employees. (Round your answer to 2 decimal places.) d. The impact on expenses of matching capacity with demand. (Round down your potential adjustment in the number of employees to a whole number.) Show less a. Shipping minutes used to meet demand b. Unused capacity in minutes c. Unused capacity in number of employees d. Impact on expenses of matching capacity with demand

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Kermit D. Larson, William W. Pyle

4th Edition

0256067813, 978-0256067811

More Books

Students also viewed these Accounting questions

Question

What are the three revenue recognition alternatives?

Answered: 1 week ago

Question

Why is it important to have a code of ethics?

Answered: 1 week ago