Question
As part of Silver Springs' implementation of activity-based costing, it needed to identify activities,resources, and cost drivers. The following table summarizes the cost-allocation bases Silver
As part of Silver Springs' implementation of activity-based costing, it needed to identify activities,resources, and cost drivers. The following table summarizes the cost-allocation bases Silver Springs has chosen for its activities and resources: Cost-Allocation Base number of investments number of applications number of loans number of person hours number of minutes number of computer transactions number of square feet number of loan inquiries number of transactions number of schedules number of securities
For each of the brief descriptions that follows, indicate whether it is an activity (A) or a resource (R). For each activity or resource, choose the most appropriate cost-allocation base from the preceding list and indicate for each resource whether it is a fixed-cost (F) or variable-cost (V) resource. The first item is completed as a guide.
a. Contract maintenance of building (R; number of square feet; b. Staff for front-line customer service c. External computing services d. Development of repayment schedules e. Staff for consulting with customers and arranging the portfolios f. External service bureau providing customer credit checks for loan applications g. Preparing investment documents for customers h. Research to evaluate a loan application i. Overtime by back-office staff j.Telephones/facsimile k. Staff for service and background research 1. Establish customer collateral for approved loans
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