Asked by KAPIL PATEL on Jun 14, 2024
Verified
Roediger 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 total cost assigned to Customer Q would be closest to:
A) $94
B) $15
C) $233
D) $123
Time-Driven Activity-Based Costing
Time-driven activity-based costing is an approach to costing that assigns resource costs directly to products or services based on the actual time spent on activities, improving accuracy and simplifying the costing process.
Customer Service Department
A division of a business dedicated to addressing customer inquiries, complaints, and providing assistance.
Customer Cost Analysis
The process of evaluating all costs involved in acquiring and maintaining customers, often used to assess the profitability of customer relationships.
- Ascertain the comprehensive cost allocated to patrons employing time-driven activity-based costing figures.
Verified Answer
Activity A: 2 hours x $30/hour = $60
Activity B: 1 hour x $20/hour = $20
Activity C: 3 hours x $25/hour = $75
Activity D: 2 hours x $10/hour = $20
Total cost for Customer Q = $60 + $20 + $75 + $20 = $175
Adding the allocated overhead cost of $58 gives us a total cost of $233, which is closest to option C. Therefore, the answer is C.
Learning Objectives
- Ascertain the comprehensive cost allocated to patrons employing time-driven activity-based costing figures.
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