Golding Bank provided the following data about its resources and activities for its checking account process:

€¢ Computers are used only by the issuing (30 percent) and processing transaction (70 percent) activities.
€¢ Phone and supplies are 60 percent customer inquiries with the other 40 percent divided equally among the remaining activities, including supervising the checking operation.
€¢ The supervisor spends 100 percent of his time on supervision. In addition to the 25,000 clerical hours, there are 2,000 hours of supervision used (the hours used by the supervising clerks activity, which is not listed above).
Required:
1. Prepare a work distribution matrix for the five primary activities.
2. Calculate the cost of each activity.
3. What if the cost of the supervising activity is assigned to the other four activities? Why would this be done? If it is done, what is the final cost of these four primary activities?

Transcribed Image Text:

Resources Activities Clerical Hours Supervision Phone and supplies Salaries Computer S 70,000 90,000 275,000 25,000 $460,000 Processing accounts Issuing statements Processing transactions Answering customer inquiries 10,000 5,000 7,000 3,000 25,000 Total Total