Chapter 7.A, Problem 4P

PROBLEM 7A-4 Time-Driven Activity-Based Costing LO 7-6, LO 7-7

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:

	Customer L	Customer M	Customer N	All Customers
Number of line items picked	.. 280	160	90	335,000
Number of boxes packaged	.. 50	20	15	46,800
Number of deliveries loaded	.. 6	2	10	12,100

Required:

1. Using the customer cost analysis shown in Exhibit 7A-2 as your guide, compute the following:
1. The cost per minute of the resource supplied in the Shipping Department.
2. The time-driven activity rate for each of Stahl's three activities.
3. The total labor costs consumed by Customer L. Customer M. and Customer N.
2. Using the capacity analysis shown in Exhibit 7A-3 as your guide, compute the following:
1. The used capacity in minutes.
2. The unused capacity in minutes.
3. The unused capacity in number of employees. (Do not round your answer to a whole number.)
4. The impact on expenses of matching capacity with demand. (Be sure to round your potential adjustment in the number of employees to a whole number.)