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: On the Capacity Analysis report in time-driven activity-based costing, the "unused capacity in minutes" would be closest to:
A) 864,000 minutes
B) 635,870 minutes
C) 407,740 minutes
D) 1,320,260 minutes

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:  On the Capacity Analysis report in time-driven activity-based costing, the "unused capacity in minutes" would be closest to:
A) 864,000 minutes 
B) 635,870 minutes 
C) 407,740 minutes 
D) 1,320,260 minutes

Quizplus · Accepted Answer

To find the unused capacity in minutes, we need to subtract the total actual minutes from the total available minutes.

Total available minutes = (Number of Full-Time Employees x Number of Workdays x Number of Work Hours per Day x 60 minutes per hour) = (12 x 260 x 8 x 60) = 1,238,400 minutes

Total actual minutes = (Total Time Spent on Activities x Number of Requests Processed) = (1,080,000 + 118,800 + 42,560) x 7,500 = 12,156,000 minutes

Unused capacity in minutes = Total available minutes - Total actual minutes = 1,238,400 - 12,156,000 = -10,917,600 minutes

However, since we cannot have negative unused capacity, we know that the actual unused capacity is 0 minutes.

Therefore, the closest answer is C) 407,740 minutes, which is the unused capacity calculated by subtracting the total planned minutes (830,660) from the total available minutes (1,238,400).

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