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		37
Average salary per employee	$	23,000
Weeks of employment per year		52
Hours worked per week		40
Practical capacity percentage		85	%
	Line-Item Picking			Packaging	Loading Deliveries
Minutes per unit of the activity		5		15	30
	Customer L			Customer M	Customer N	All Customers
Number of line items picked		285		185	135	455,000
Number of boxes packaged		47		27	29	47,200
Number of deliveries loaded		6		2	10	15,100

Required:

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

 

a. The used capacity in minutes.

b. The unused capacity in minutes.

c. The unused capacity in a number of employees.

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

EXHIBIT SA-2 Ridley Company: Customer Cost Analysis 12345 A Ridley Company Customer Service Department Customer Cost Analysis 5 Step 1: Calculate the cost per minute of the resource supplied 6 7 Customer Service Department: 8 Number of employees (a) 9 Average salary per employee (b) 10 Total cost of resources supplied (a) x (b) 11 12 Practical capacity per employee (in minutes) (a) 13 Number of employees (b) 14 Practical capacity of resources supplied (in minutes) (a) x (b) 15 16 Cost per minute of the resource supplied 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) x (b) 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) x (b) 27 28 Number of customer queries (a) 29 Time-driven activity rate (b) 30 Query resolution costs assigned (a) x (b) 31 32 Number of credit checks (a) 33 Time-driven activity rate (b) 34 Credit review costs assigned (a) (b) 35 36 Total customer service costs assigned 37 14PH Exhibit 5A-1 Exhibit SA-2 Extr 30 $ 29,952 $ 898,560 99,840 30 2,995,200 S 0.30 Order Query processing resolution $ $ S ss $ Customer A Customer B Customer C 7 30 3.00 S 90.00 $ 18 3.00 $ 3.00 54.00 S 21.00 17 $ 9.00 S SS $ 153.00 S 5. S S C 30 10 0.30 S 0.30 S 3.00 $ 9.00 $ $ 1 12.00 S 12.00 S Credit reviews D 10 9.00 $ 90.00 $ 1 12.00 S 12.00 $ 40 0.30 12.00 8 9.00 72.00 1 12.00 12.00 $ 255.00 $ 156.00 $ 105.00