Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4-43 Two-Stage Activity-Based Costing, Banking, Benchmarking (This exercise is a continuation of Exercise 4-42 and should be assigned only if Exercise 4-42 is also assigned.)

image text in transcribed

4-43 Two-Stage Activity-Based Costing, Banking, Benchmarking (This exercise is a continuation of Exercise 4-42 and should be assigned only if Exercise 4-42 is also assigned.) A part of the activity analysis conducted at the Maple Lake branch of Buffalo State Savings Bank (BSSB) was identifying potential cost drivers for each major activity. The following cost drivers were chosen because they were both plausible and reliable and data were available: CHAPTER 4 COST MANAGEMENT SYSTEMS AND ACTIVITY-BASED COSTING 183 Of the 3,100 customers of the branch, only 400 are local businesses. The business-customer class generated 20 new accounts, 89,000 deposits and withdrawals, and 22,000 other transactions. The implementation of ABC at all branches of BSSB provided sufficient data for internal benchmarking. The following are the lowest activity costs among all branches implementing two-stage ABC systems: 1. Determine the allocated (indirect) cost per account for retail and commercial accounts. Use Exhibit 4-18 as a guide. 2. Under what conditions would benchmarking between the Maple Lake branch of BSSB and the other branches be inappropriate? 3. What do the results of the ABC study suggest? 4-43 Two-Stage Activity-Based Costing, Banking, Benchmarking (This exercise is a continuation of Exercise 4-42 and should be assigned only if Exercise 4-42 is also assigned.) A part of the activity analysis conducted at the Maple Lake branch of Buffalo State Savings Bank (BSSB) was identifying potential cost drivers for each major activity. The following cost drivers were chosen because they were both plausible and reliable and data were available: CHAPTER 4 COST MANAGEMENT SYSTEMS AND ACTIVITY-BASED COSTING 183 Of the 3,100 customers of the branch, only 400 are local businesses. The business-customer class generated 20 new accounts, 89,000 deposits and withdrawals, and 22,000 other transactions. The implementation of ABC at all branches of BSSB provided sufficient data for internal benchmarking. The following are the lowest activity costs among all branches implementing two-stage ABC systems: 1. Determine the allocated (indirect) cost per account for retail and commercial accounts. Use Exhibit 4-18 as a guide. 2. Under what conditions would benchmarking between the Maple Lake branch of BSSB and the other branches be inappropriate? 3. What do the results of the ABC study suggest

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The ASQ Auditing Handbook

Authors: J. P. Russell

3rd Edition

0873896661, 978-0873896665

More Books

Students also viewed these Accounting questions

Question

denigration of emotional outbursts; being reserved;

Answered: 1 week ago