The total cost of an information request is calculated by summing the costs of the resources consumed by the activity.

1. Professional Staff Cost: The time per request is 15 minutes (0.25 hours). At a rate of $100 per hour, the cost is 0.25 $100 = $25.00.

2. Administration Staff Cost: First, the hourly rate for administration staff is calculated: $75,600 / 6,000 hours = $12.60 per hour. The time per request is 20 minutes (1/3 hour). The cost is (1/3) $12.60 = $4.20.

3. Printing and Posting Cost: This is a direct cost of $1.00 per request.

The total cost is the sum of these components: $25.00 + $4.20 + $1.00 = $30.20.

1. Drury

C. (2018). Management and Cost Accounting (10th ed.). Cengage Learning. Chapter 5

"Activity-Based Costing

" explains the two-stage allocation process

where costs are first assigned to activity cost pools (e.g.

administration) and then to cost objects (e.g.

an information request) using a cost driver rate (pp. 104-108).

2. Horngren

C. T.

Datar

S. M.

& Rajan

M. V. (2015). Cost Accounting: A Managerial Emphasis (15th ed.). Pearson Education. Chapter 5 discusses the methodology for calculating activity rates

similar to the calculation of the administration staff's hourly rate

and then assigning these costs to products or services based on consumption (pp. 150-155).

3. Kaplan

R. S.

& Cooper

R. (1998). Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance. Harvard Business School Press. The book details the principles of ABC

emphasizing tracing resource costs (like staff time and materials) to the activities they perform

which directly aligns with the calculation method used (Chapter 3

"How to Design an Activity-Based Cost System").