Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account...
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Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account products and their associated resources and activities: Resources Activities $60,000 Processing accounts 86,000 Issuing statements 216,000 Processing transactions 22,000 Answering customer inquiries 384,000 Supervision Phone and supplies Salaries Computer Total At practical capacity, Golding uses 24,000 check processing hours. Required: Time per Unit Activity Driver 0.20 hr. No. of accounts 0.10 hr. No. of statements 0.05 hr. No. of transactions 0.15 h. No. of inquiries Traditional Interest-Bearing Account Account If the total number of statements issued was 22,000, calculate the cost of the issuing statements activity. Check My Work 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. per hour Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts per account Issuing statements per statement Processing transactions per transaction Answering inquiries per inquiry 2,200 60,000 160,000 1,500 1,700 10,000 120,000 1,500 Previous Ne If the total number of statements issued was 22,000, calculate the cost of the issuing statements activity. 2. Assuming there are 2,000 interest-bearing checking accounts, calculate the cost per account using the activity rates from Requirement 1. Round your answers to the nearest cent. Unit cost: 3. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. Again, assuming that there are 2,200 interest bearing accounts, show that the resource cost per account is the same as calculated in Requirement 2. Round your answers to the nearest cent. 4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $3,840 reduction in total resource costs? Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. per hour Update all the activity rates for these changes in operating conditions. Processing accounts Issuing statements Processing transactions Answering inquiries per account per statement per transaction per inquiry Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account products and their associated resources and activities: Resources Activities $60,000 Processing accounts 86,000 Issuing statements 216,000 Processing transactions 22,000 Answering customer inquiries 384,000 Supervision Phone and supplies Salaries Computer Total At practical capacity, Golding uses 24,000 check processing hours. Required: Time per Unit Activity Driver 0.20 hr. No. of accounts 0.10 hr. No. of statements 0.05 hr. No. of transactions 0.15 h. No. of inquiries Traditional Interest-Bearing Account Account If the total number of statements issued was 22,000, calculate the cost of the issuing statements activity. Check My Work 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. per hour Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts per account Issuing statements per statement Processing transactions per transaction Answering inquiries per inquiry 2,200 60,000 160,000 1,500 1,700 10,000 120,000 1,500 Previous Ne If the total number of statements issued was 22,000, calculate the cost of the issuing statements activity. 2. Assuming there are 2,000 interest-bearing checking accounts, calculate the cost per account using the activity rates from Requirement 1. Round your answers to the nearest cent. Unit cost: 3. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. Again, assuming that there are 2,200 interest bearing accounts, show that the resource cost per account is the same as calculated in Requirement 2. Round your answers to the nearest cent. 4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $3,840 reduction in total resource costs? Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. per hour Update all the activity rates for these changes in operating conditions. Processing accounts Issuing statements Processing transactions Answering inquiries per account per statement per transaction per inquiry
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
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