The operations vice president of Security Home Bank is investigating the efficiency of the bank's operations....

 

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The operations vice president of Security Home Bank is investigating the efficiency of the bank's operations. She is concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt to show how those costs are related to the various services provided by the bank. The operations vice president has asked for your help in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account, the cost of processing deposits and withdrawals, and the cost of processing other customer transactions. The Westfield branch of Security Home Bank submitted the following cost data for last year: Teller wages Assistant branch manager salary Branch manager salary Total $ 159,000 62,000 87,000 $ 308,000 Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are organization-sustaining costs that cannot be meaningfully assigned to individual customer transactions such as depositing checks. In addition to the cost data above, the employees of the Westfield branch were interviewed concerning how their time was distributed last year across the activities included in the activity-based costing study. The results of those interviews appear below: Distribution of Resource Consumption Across Activities Opening Accounts Teller wages 4% Assistant branch manager salary 14% Branch manager salary 4% Processing Deposits and Withdrawals 70% 15% 0% Processing Other Customer Transactions 16% 29% 16% Other Activities Totals 10% 100% 42% 100% 80% 100% The manager of the Westfield branch of Security Home Bank provided the following data concerning the branch's transactions during the past year: Activity Opening accounts Processing deposits and withdrawals Processing other customer transactions Required: Total Activity at the Westfield Branch 185 new accounts opened 48,500 deposits and withdrawals processed 1,250 other customer transactions processed 1. Compute the activity rates for the activity-based costing system. The operations vice president of Security Home Bank is investigating the efficiency of the bank's operations. She is concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt to show how those costs are related to the various services provided by the bank. The operations vice president has asked for your help in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account, the cost of processing deposits and withdrawals, and the cost of processing other customer transactions. The Westfield branch of Security Home Bank submitted the following cost data for last year: Teller wages Assistant branch manager salary Branch manager salary Total $ 159,000 62,000 87,000 $ 308,000 Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are organization-sustaining costs that cannot be meaningfully assigned to individual customer transactions such as depositing checks. In addition to the cost data above, the employees of the Westfield branch were interviewed concerning how their time was distributed last year across the activities included in the activity-based costing study. The results of those interviews appear below: Distribution of Resource Consumption Across Activities Opening Accounts Teller wages 4% Assistant branch manager salary 14% Branch manager salary 4% Processing Deposits and Withdrawals 70% 15% 0% Processing Other Customer Transactions 16% 29% 16% Other Activities Totals 10% 100% 42% 100% 80% 100% The manager of the Westfield branch of Security Home Bank provided the following data concerning the branch's transactions during the past year: Activity Opening accounts Processing deposits and withdrawals Processing other customer transactions Required: Total Activity at the Westfield Branch 185 new accounts opened 48,500 deposits and withdrawals processed 1,250 other customer transactions processed 1. Compute the activity rates for the activity-based costing system.