.Tullio Corporation is conducting a time-driven activity-based costing study in
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Question
.Tullio Corporation is conducting a time-driven activity-based costing study in its Tech 11)- Support Department. The company has provided the following data to aid in that study Tullio Corporation Order Fulfillment Department Data Inputs Resource Data: Number of employees Average salary per employee Practical capacity per employee (in minutes) 20 S 36,900 90,000 Preparing Activity Data: Minutes per unit of the activity Resolving Change Routing Calls Problems Orders 12 Number of calls routed Number of problems resolved Number of change orders prepared All Customers 45,820 36,370 On the Capacity Analysis report in time-driven activity-based costing, the "potential adjustment in the number of employees" would be closest to A) (4.00) employees C) 5.00 employees D) (5.00) employees 12) 12) Which costs will change with a decrease in activity within the relevant range? A) Unit fixed cost and total fixed cost B) Unit variable cost and unit fixed cost C) Unit fixed costs and total variable cost D) Total fixed costs and total variable cost. 13) 13) Solt Corporation uses a job-order costing system and has provided the following Finished Goods 38,000 Credits Bal. 1/1 50,000 Bal. 12/31 The Cost of Goods Manufactured for the year was $415,000.The unadjusted Cost of Goods Sold for the year was: C) $453,000 D) $503,000 A) S415,000 B) S403,000Explanation / Answer
11. Answer: Option A) (4.00) employees
There is currently an excess capacity of 4.08 employees. Hence the potential adjustment would be closest to reducing the number of employees by 4.
12. Answer: Option C) Unit fixed costs and total variable costs
With a decrease in activity within the relevant range, the total fixed costs will remain constant however, the per unit fixed costs will increase due to the fixed costs being spread over a lesser number of units. While the per unit variable cost will remain same, there will be a decrease in the total variable costs due to lesser number of units.
13. Answer: Option B) $403,000
Capacity Analysis: Total available capacity (minutes) 1800000 (90000 minutes x 20 employees) Capacity required (minutes) 1432380 Excess capacity (minutes) 367620 Number of employees (367620/90000) 4.08Related Questions
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