Reference no: EM133088168
Question - 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:
Number of employees: 34
Average salary per employee: $34,000
Weeks of employment per year: 52
Hours worked per week: 40
Practical capacity percentage: 80%
Minutes per Unit of the activity:
Line Item picking: 5
Packaging: 15
Loading deliveries: 30
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Customer L
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Customer M
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Customer N
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All Customers
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# of line items picked
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280
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160
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90
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335,000
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# of boxes packaged
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50
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20
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15
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46,800
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# of deliveries loaded
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6
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2
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10
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12,100
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Required -
1. Calculate the cost per minute of the resource supplied (shipping employee).
2. Calculate the time-driven activity rate for
a. Line Item Picking:
b. Packaging:
c. Loading deliveries:
3. What is the total cost of Shipping for each of the customers:
a. Customer L
b. Customer M
c. Customer N
4. Let's assume that we provide shipping for customers for free. Given the costs you calculated in #3, list 2 actions that you can take with customer L to change their behavior.
5. Let's assume that we drop customer L, what would be the impact on profits to Stahl?
6. What is the cost of used capacity for the Shipping department in minutes?
7. What is the cost of excess/unused capacity in minutes?
8. List 2 actions that you would take regarding the excess capacity.
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