Schweiss Corporation is conducting a time-driven activity-based costing study in its Customer Service 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 cost per minute of the resource supplied would be closest to:
A) $17.50 per minute
B) $0.32 per minute
C) $0.35 per minute
D) $15.75 per minute

Question

Schweiss Corporation is conducting a time-driven activity-based costing study in its Customer Service 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 cost per minute of the resource supplied would be closest to:
A) $17.50 per minute 
B) $0.32 per minute 
C) $0.35 per minute 
D) $15.75 per minute

Quizplus · Accepted Answer

To calculate the cost per minute of the resource supplied, we need to divide the total cost of each activity by the total time spent on that activity.

For activity 1 (Processing Customer Calls), the total cost is $25,830 and the total time is 74,400 minutes, so the cost per minute is:

$25,830 ÷ 74,400 = $0.347 = $0.35 (rounded to the nearest cent)

Therefore, the closest answer choice is C) $0.35 per minute.

Schweiss Corporation Is Conducting a Time-Driven Activity-Based Costing Study in Its