Oltz Corporation is conducting a time-driven activity-based costing study in its

Question

Oltz Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study:

On the Customer Cost Analysis report in time-driven activity-based costing, the total cost assigned to Customer U would be closest to:

Multiple Choice

$0.00

$174.24

$79.20

$95.04

Oltz Corporation Customer Support Department Data Inputs Resource Data: Number of employees 26 Average salary per employee $ 39,600 Practical capacity per employee (in minutes) 90,000

Explanation / Answer

Practical capacity per employee = 90000 minutes

Avg salary each month of one employee= 39600.

Therefore, cost per minute = 39600 / 90000 = 0.44

Analysis of Customer U:

Time spent in calls recd = No of calls recd x inutes per activity = 9 x 20 = 180 minutes

Time spent in issues resolved = No of issues x minutes per issue = 9 x 24 = 216 minutes

Therefore, total cost assigned will be = (180+216) x 0.44 = 174.22

Kindly rate f you find the solution explanatory and satisfactory

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