The Maple Lake branch of Buffalo State Savings Bank (BSSB) is a retail branch in a rapidly
Question:
The Maple Lake branch has the following cost data for the last year:
Teller wages ........... $ 370,000
RSM salaries and benefits ...... 220,000
Managing officer salary and benefits . 120,000
Other bank costs ......... 400,000
Total .............. $1,110,000
The other bank costs include depreciation on the facility including furniture, building, equipment, insurance, rentals of computers, contracted computer services, telecommunications, and utilities. These costs cannot be directly or indirectly related to routine bank activities, such as processing new accounts or processing deposits or withdrawals, and, thus, are unallocated. There are no costs that can be traced directly to customers so the Maple Lake branch has just two types of costsindirect and unallocated. All employees have been interviewed as part of the ABC study. For example, tellers were asked how they spent their time. Three major activities were identified. They said that they spent most of their time (55%) processing deposits and withdrawals. They also estimated that they spent about 20% of their time processing new accounts and about 15% of their time processing other transactions. The remaining 10% of their time was spent on all other banking activities. The complete results of the interviews are presented in the following table:
Determine the total cost of each of the three major activities conducted at the Maple Lake branch of BSSB. Use Exhibit 4-18 as a guide. (Note that this represents the first stage in the two-stage ABCmethod.)
Step by Step Answer:
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta