Question:
Golding Bank is in the process of implementing an activity-based costing system. A copy ofan interview with the manager of Golding’s Credit Card Department follows.![image text in transcribed](https://dsd5zvtm8ll6.cloudfront.net/images/question_images/1718/9/5/1/90266751fde113681718951900648.jpg)
![image text in transcribed](https://dsd5zvtm8ll6.cloudfront.net/images/question_images/1718/9/5/1/91666751fec742331718951915357.jpg)
Required:
Prepare an activity dictionary using five columns: activity name, activity description, activity type (primary or secondary), cost object(s), and activity driver.LO1
Transcribed Image Text:
QUESTION 1: How many employees are in your department? RESPONSE: There are eight employees, including me. QUESTION 2: What do they do (please describe)? RESPONSE: There are four major activities: supervising employees, processing credit card transactions, issuing customer statements, and answering customer questions. QUESTION 3: Do customers outside your department use any equipment? RESPONSE: Yes. Automatic bank tellers service customers who require cash advances. QUESTION 4: What resources are used by each activity (equipment, materials, energy)? RESPONSE: We each have our own computer, printer, and desk. Paper and other sup- plies are needed to operate the printers. Of course, we each have a telephone as well. QUESTION 5: What are the outputs of each activity? RESPONSE: Well, for supervising, I manage employees' needs and try to ensure that they carry out their activities efficiently. Processing transactions produces a posting for each transaction in our computer system and serves as a source for preparing the monthly statements. The number of monthly customer statements has to be the product for the issuing activity, and I suppose that the number of customers served is the output for the answering activity. And I guess that the number of cash advances would measure the product of the automatic teller activity, although the teller really generates more transactions for other products such as checking and savings accounts. So, perhaps the number of teller transactions is the real output.