19-31

ers to requirements (b) and (c). suming that an average cont per hour for all LO2, 3, 4, 6 P19-31. Activity-Based Costing in a Service Organization Banctronics Inc. has 10 automatic teller machines (ATM) spread throughout the city maintained by the Management will use the information you develop, along with other information pertaining to the vol ATM Department. You have been assigned the task of determining the cost of operating each machine machine and/or changing security arrangements for a particular machine ume and type of transactions at each machine, to evaluate the desirability of continuing to operate each The ATM Department consists of a total of six employees: a supervisor, a head cashier, two - sociate cashiers, and two maintenance personnel. The associate cashiers make between two and four daily trips to each machine to collect and replenish cash and to replenish supplies, deposit tickets, and so forth. Each machine contains a small computer that automatically summarizes and reports transac tions to the head cashier. The head cashier reconciles the activities of the two associate cashiers to the computerized reports. The supervisor, who does not handle cash reviews the reconciliation. When an automatic teller's computer, a customer, or a cashier reports a problem, the two maintenance employees and one cashier are the maintenance employees repair the machine. cashiers spend approximately 25% of their time on maintenance-related activities and 75% on daily trips. The head cashier's time is divided, with 60% directly related to daily trips to each machine and 40% related to supervising cashiers on maintenance calls. The supervisor devotes 20% of the time to dispatched immediately. The cashier removes all cash and transaction records, and Maintenance employees spend all of their time on maintenance-related activities. The associate daily trips to each machine and 80% to the equal supervision of each employce. Cost information for a recent month follows: Salaries Supervisor. Head cashier Other ($3,000 each for other cashiers; $3,500 each for maintenance employees) $ 8,000 6,000 13,000 Lease and operating costs Cashiers' service vehicle Maintenance service vehicle. Office rent and utilities Machine lease, space rent, and utilities ($2,000 each machine) Total 2,400 4,800 12,000 20,000 $66,200 hes Related monthly activity information for this month follows: Machine Daily Trips Maintenance Call Hours 22 20 1 2 3 4 5 6 7 8 9 10. 40 50 40 80 40 80 80 30 20 40 18 20 22 18 24 14 16 16 Total 500 190 . . Additional information follows: The office is centrally located with about equal travel time to each machine. Maintenance hours include travel time. The cashiers' service vehicle is used exclusively for routine visits. The office space is divided equally between the supervisor and the head cashier. Required a. Determine the monthly operating costs of machines 7 and 8 when cost assignments are based on the number of machines. b. Determine the activity cost of a routine trip and a maintenance hour for the month given. Round answers to the nearest cent. c. Determine the operating costs assigned and reassigned to machines 7 and 8 when activity-based costing is used. d. How can ABC cost information be used by Banctronics Inc. to improve the overall management of monthly operating costs? ers to requirements (b) and (c). suming that an average cont per hour for all LO2, 3, 4, 6 P19-31. Activity-Based Costing in a Service Organization Banctronics Inc. has 10 automatic teller machines (ATM) spread throughout the city maintained by the Management will use the information you develop, along with other information pertaining to the vol ATM Department. You have been assigned the task of determining the cost of operating each machine machine and/or changing security arrangements for a particular machine ume and type of transactions at each machine, to evaluate the desirability of continuing to operate each The ATM Department consists of a total of six employees: a supervisor, a head cashier, two - sociate cashiers, and two maintenance personnel. The associate cashiers make between two and four daily trips to each machine to collect and replenish cash and to replenish supplies, deposit tickets, and so forth. Each machine contains a small computer that automatically summarizes and reports transac tions to the head cashier. The head cashier reconciles the activities of the two associate cashiers to the computerized reports. The supervisor, who does not handle cash reviews the reconciliation. When an automatic teller's computer, a customer, or a cashier reports a problem, the two maintenance employees and one cashier are the maintenance employees repair the machine. cashiers spend approximately 25% of their time on maintenance-related activities and 75% on daily trips. The head cashier's time is divided, with 60% directly related to daily trips to each machine and 40% related to supervising cashiers on maintenance calls. The supervisor devotes 20% of the time to dispatched immediately. The cashier removes all cash and transaction records, and Maintenance employees spend all of their time on maintenance-related activities. The associate daily trips to each machine and 80% to the equal supervision of each employce. Cost information for a recent month follows: Salaries Supervisor. Head cashier Other ($3,000 each for other cashiers; $3,500 each for maintenance employees) $ 8,000 6,000 13,000 Lease and operating costs Cashiers' service vehicle Maintenance service vehicle. Office rent and utilities Machine lease, space rent, and utilities ($2,000 each machine) Total 2,400 4,800 12,000 20,000 $66,200 hes Related monthly activity information for this month follows: Machine Daily Trips Maintenance Call Hours 22 20 1 2 3 4 5 6 7 8 9 10. 40 50 40 80 40 80 80 30 20 40 18 20 22 18 24 14 16 16 Total 500 190 . . Additional information follows: The office is centrally located with about equal travel time to each machine. Maintenance hours include travel time. The cashiers' service vehicle is used exclusively for routine visits. The office space is divided equally between the supervisor and the head cashier. Required a. Determine the monthly operating costs of machines 7 and 8 when cost assignments are based on the number of machines. b. Determine the activity cost of a routine trip and a maintenance hour for the month given. Round answers to the nearest cent. c. Determine the operating costs assigned and reassigned to machines 7 and 8 when activity-based costing is used. d. How can ABC cost information be used by Banctronics Inc. to improve the overall management of monthly operating costs