sModule 2 Homework Assignment-Kelsey Blankenberger Page 10 of 12 Grange Company uses a traditional activity-based costing system to assign $1,200,000 of committed resource costs for customer service on the basis of the following information gathered from interviews with customer service personnel: (Click the icon to view the information.) Read the requirements nt (a) Compute the activity cost driver rates using this system. (Round your answers to the nearest cent) Activity Handle customer orders Process customer complaints Activity Cost Driver Rate 64.00 200.00 150.00 Perform customer credit checks Requirement (b) Suppose instead that Grange uses time-driven ABC to assign the $1,200,000 of committed resource costs to the three activities. Compute the time-driven activity cost driver rates, assuming 20,000 hours the unit time estimates given in the problem statement. (Round your answers to the nearest cent.) Activity Activity Cost Driver Rate 15.00 165.00 270.00 Handle customer orders Process customer complaints Perform customer credit checks Requirement (c) Suppose that the quantities of activities this period are 15,000 customer orders, 600 customer complaints, and 800 credit checks. Using the information and activity cost driver rates developed in part b, determine th cost assigned to each of the activities and the estimated hours of unused capacity as well as the associated cost. What actions might managers take after evaluating such information? Begin by determining the cost assigned to each of the activities Activity Unit Time CHours) Total Hours Cost Assigned 0.25 2.75 4.50 Handle customer orders Process customer complaints Perfom customer credit checks450 hours and the unassigned cost is $ The estimated hours of unused capacity is What actions might managers take after evaluating such information? Managers (1) (2)by (3) Requirement (d) Suppose that in the next time period, the quantities of activities change to 15,500 customer order the unused capacity and its associated expense. Alternatively, managers 560 customer complaints, and 850 credit checks. Using the information and activity cost driver rates developed in cost Begin by determining the cost assigned to each of the activities determine the cost assigned to each of the activities and the estimated hours of unused capacity as well as the as sModule 2 Homework Assignment-Kelsey Blankenberger Page 10 of 12 Grange Company uses a traditional activity-based costing system to assign $1,200,000 of committed resource costs for customer service on the basis of the following information gathered from interviews with customer service personnel: (Click the icon to view the information.) Read the requirements nt (a) Compute the activity cost driver rates using this system. (Round your answers to the nearest cent) Activity Handle customer orders Process customer complaints Activity Cost Driver Rate 64.00 200.00 150.00 Perform customer credit checks Requirement (b) Suppose instead that Grange uses time-driven ABC to assign the $1,200,000 of committed resource costs to the three activities. Compute the time-driven activity cost driver rates, assuming 20,000 hours the unit time estimates given in the problem statement. (Round your answers to the nearest cent.) Activity Activity Cost Driver Rate 15.00 165.00 270.00 Handle customer orders Process customer complaints Perform customer credit checks Requirement (c) Suppose that the quantities of activities this period are 15,000 customer orders, 600 customer complaints, and 800 credit checks. Using the information and activity cost driver rates developed in part b, determine th cost assigned to each of the activities and the estimated hours of unused capacity as well as the associated cost. What actions might managers take after evaluating such information? Begin by determining the cost assigned to each of the activities Activity Unit Time CHours) Total Hours Cost Assigned 0.25 2.75 4.50 Handle customer orders Process customer complaints Perfom customer credit checks450 hours and the unassigned cost is $ The estimated hours of unused capacity is What actions might managers take after evaluating such information? Managers (1) (2)by (3) Requirement (d) Suppose that in the next time period, the quantities of activities change to 15,500 customer order the unused capacity and its associated expense. Alternatively, managers 560 customer complaints, and 850 credit checks. Using the information and activity cost driver rates developed in cost Begin by determining the cost assigned to each of the activities determine the cost assigned to each of the activities and the estimated hours of unused capacity as well as the as
