Schlaefer Corporation is conducting a time-driven activity-based costing study i

Question

Schlaefer Corporation is conducting a time-driven activity-based costing study in its Tech Support Department. The company has provided the following data to aid in that study: Schlaefer Corporation Tech Support Department Data Inputs Resource Data: Number of employees 16 Average salary per employee $ 46,440 Weeks of employment per year 50 Minutes available per week (40 hours × 60 minutes) 2,400 Practical capacity percentage 90 % Activity Data: Routing Calls Resolving Problems Preparing Change Orders Minutes per unit of the activity 16 26 32 Cost Object Data: All Customers Number of calls routed 43,740 Number of problems resolved 21,130 Number of change orders prepared 2,220 On the Capacity Analysis report in time-driven activity-based costing, the “unused capacity in minutes” would be closest to: 635,870 minutes 407,740 minutes 864,000 minutes 1,320,260 minutes

Explanation / Answer

Unused capacity in minutes would be closest to 407740 minutes

Weeks of employment per year 50 Minutes available per week 2400 Total minutes of employment per year 50*2400 120000 Number of employees 16 Total minutes available 120000*16 1920000 Practical Capacity 1920000*90% 1728000 Used Capacity: Routing calls Resolving problems change orders Number 43740 21130 2220 Minutes used 16 26 32 Total minutes used 699840 549380 71040 1320260 Available minutes 1728000 Unused capacity 407740

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