Problem 5A-5 (Algo) Time-Driven Activity-Based Costing [LO5-6, LO5-7] 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 $60,000 Number of employees Average salary per employee Weeks of employment per year Hours worked per week Practical capacity percentage New Product Design Engineering Change Orders Product Testing Hours per unit of the activity Customer A Customer B Customer c All Customers 125 Number of new products designed Number of engineering change orders Number of products tested 195 Required: 1. Using the customer cost analysis as demonstrated in Exhibit 5A-2 in your textbook, 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 5A-3 in your textbook, 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 195, the number of engineering change orders would jump to 265, and the number of products tested would rise to 185. 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 Required 1 Required 2 Required 3 1. Using the customer cost analysis as demonstrated in Exhibit SA-2 in your textbook, 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. (Do not round intermediate calculations.) c. The total engineering costs consumed by Customer A, Customer B, and Customer C. (Do not round intermediate calculations.) (For all requirements, round your answers to 2 decimal places.) Show less Cost per hour of the resource supplied b. Time-driven activity rate: New Product Design Engineering Change Orders Product Testing Total engineering labor costs assigned Customer A Customer B Customer C Required 2 > Required 1 Required 2 Required 3 2. Using the capacity analysis as demonstrated in Exhibit 5A-3 in your textbook, compute the following: a. The used capacity in hours. b. The unused capacity in hours. 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. (Be sure to round down your potential adjustment in the number of employees to a whole number. Negative amounts should be indicated by a minus sign.) Show less a. Engineering hours used to meet demand b. Unused capacity in hours c. Unused capacity in number of employees d. Impact on expenses of matching capacity with demand Required 1 Required 2 Required 3 3. Assume that Athens is considering expanding its business such that the estimated number of new products designed would increase to 195, the number of engineering change orders would jump to 265, and the number of products tested would rise to 185. Using these revised figures, calculate the following: a. The used capacity in hours. b. The unused capacity in hours. (Negative amounts should be indicated by a minus sign.) C. The unused capacity in number of employees. (Round your answer to 2 decimal places and Negative amounts should be indicated by a minus sign.) d. The impact on expenses of matching capacity with demand. (Be sure to round your potential adjustment in the number of employees to a whole number.) Show less a. The used capacity in hours The unused capacity in hours Unused capacity in number of employees d. Impact on expenses of matching capacity with demand Required 2
