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1. BEX.04.07

BEX.04.07

Simplifying the ABC System: TDABC Golding Bank provided the following data about its resources and activities for its checking account process: Traditional Interest-Bearing Time per Unit of Activity Resources Activities Driver Account Account Supervision $70,000 Processing accounts No. of accounts 0.20 hr. 2,000 1,000 Phone and supplies 90,000 Issuing statements No. of statements 0.10 hr. 60,000 10,000 Salaries 275,000 Processing transactions No. of transactions 0.05 hr. 160,000 120,000 Computer 25,000 Answering customer inquiries No. of inquiries 0.15 hr. 1,500 1,500 Total $460,000 At practical capacity, Golding uses 25,000 check processing hours. 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 $ 273,240 X 3. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 0.20(number of accounts) + 0.10(number of statements) + 0.05(number of transactions + 0.15(number of inquiries) Again, assuming that there are 2,000 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. $ 14,850 x