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

Question

Chuong Corporation is conducting a time-driven activity-based costing study in its Order Fulfillment Department. The company has provided the following data to aid in that study: Chuong Corporation Order Fulfillment Department Data Inputs Resource Data: Number of employees 11 Average salary per employee $ 36,000 Practical capacity per employee (in minutes) 90,000 Activity Data: Processing Orders Preparing Deliveries Handling Returns Minutes per unit of the activity 10 22 44 On the Customer Cost Analysis report in time-driven activity-based costing, the time-driven activity rate for Handling Returns would be closest to: Multiple Choice $44.00 per return handled $17.60 per return handled $0.91 per return handled $0.40 per return handled

Explanation / Answer

Per minute salary = 36000/90000= $0.40 Activity rate for Handling Returns = 44*0.4= $17.60 per return handled

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