Solomon Bank's startup division establishes new branch banks. Each branch opens with three tellers. Total teller cost
Question:
Solomon Bank's startup division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $ per year. The three tellers combined can process up to customer transactions per year. If a branch does not attain a volume of at least transactions during its first year of operations, it is closed. If the demand for services exceeds transactions, an additional teller is hired and the branch is transferred from the startup division to regular operations.
Required
What is the relevant range of activity for new branch banks?
Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes or transactions. In this case the activity base is the number of transactions for a specific branch is the teller cost a fixed or a variable cost?
Determine the amount of teller cost in total and the average teller cost per branch for Solomon Bank, assuming that the startup division operates or branches. In this case the activity base is the number of branches is the teller cost a fixed or a variable cost?
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds