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4-6 Two-Stage Activity-Based Costing, Banking, Benchmarking (This exercise is a continuation of Exercise 4-6) A part of the activity analysis conducted at MVSB was identifying
4-6 Two-Stage Activity-Based Costing, Banking, Benchmarking (This exercise is a continuation of Exercise 4-6) A part of the activity analysis conducted at MVSB 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: Activity Cost Driver Amount of Cost Driver Process new Accounts of new accounts 600 Process deposits & withdrawals o f deposits & withdrawals 168,000 Process other transactions of other transactions 48.0000 of the 3,200 customers of the branch, only 410 are local businesses. The business.customer class generated 25 new accounts, 90,000 deposits and withdrawals, and 25,000 other transactions. The implementation of ABC at all branches of MVSB provided sufficient data for internal benchmarking. The following are the lowest activity costs among all branches implementing two-stage ABC systems: Activity Lowest Activity Cost per Driver Unit Open new accounts Process deposits and withdrawals Process other transactions $211.85 $ 2.55 $ 3.85 per new account per deposit or withdrawal per transaction Customer Class Lowest Customer Cost per Account Retail Commercial $132.80 S59R.RS 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 branch of MV SB and the other branches be inappropriate? 3. What do the results of the ABC study suggest
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