% E4-43 (similar to) Question Help The Cedar Park branch of Austin State Savings Bank (ASSB) is a retail branch in a rapidly growing residential area. It services individuals and local businesses. To support its services, the branch employs 14 tellers, 3 retail sales managers (RSM), and the branch managing officer. The branch services about 2,500 customers. Each of the 70 branches of ASSB is implementing ABC in order to improve profitability. ASSB's branch managing officers have been given the responsibility to implement activity-based costing. The managing officer at the Cedar Park branch decided to implement a two-stage ABC system. The following process map depicts its two-stage ABC system. Click the icon to view the process map.) The results of the ABC study are summarized in the "Internal Activity Analysis": E: (Click the icon to view the internal activity analysis.) E: (Click the icon to view the cost data for the last year.) A part of the activity analysis conducted at the Cedar Park branch of Austin State Savings Bank (ASSB) 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: (Click the icon to view the cost driver data.) (Click the icon to view the calculation of traceable costs.) (Click the icon to view the benchmarking data.) Read the requirements. DIVULUMTIL New accounts $ 580 $ 103.4483 60,000 281,500 Deposits and withdrawals $ 1 154,000 $ 1.8279 Other transactions $ 130,500 / 52,000 $ 2.5096 Next, compute the total account cost for each customer class. (Round your answers to the nearest whole dollar.) Retail New accounts Process deposits and withdrawals Process other transactions Total cost Next, compute the total account cost for each customer class. (Round your answers to the nearest whole dollar.) Retail Commercial New accounts $ Process deposits and withdrawals Process other transactions $ Total cost Determine the allocated (indirect) cost per account for retail and commercial accounts. (Round your answers to two decimal places.) Total cost Number of accounts - Cost per account Retail customers $ - $ Commercial customers $ $ Data Table All employees have been interviewed as part of the ABC study. For example, tellers were asked how they spent their time. Three major activities were identified. They said that they spent most of their time (65%) processing deposits and withdrawals. They also estimated that they spent about 5% of their time processing new accounts and about 10% of their time processing other transactions. The remaining 20% of their time was spent on all other banking activities. The results of the interviews are presented in the following table: Internal Activity Analysis Process All Other Open New Deposits and Process Other Banking Accounts Withdrawals Transactions Activities Total Teller wages 5% 65% 10% 20% 100% Retail sales 15% 15% 20% 50% 100% manager salary Managing officer 0% 5% 35% 60% 100% salary The Cedar Park branch has the following cost data for the last year. Teller wages $ 360,000 RSM salaries and benefits 280,000 Managing officer salary and benefits 110,000 Other bank costs 470,000 $ Total 1,220,000 The "other bank costs" include depreciation on the facility including furniture, building, equipment, insurance, rentals of computers, contracted computer services, telecommunications, and utilities. These costs cannot be directly or indirectly related to routine bank activities, such as processing new accounts or processing deposits or withdrawals, and, thus, are unallocated. There are no costs that can be traced directly to customers so the Cedar Park branch has just two types of costs-indirect and unallocated. Print Done Annual Flow of Cost Driver 580 Activity Cost Driver Process new accounts Number of new accounts Process deposits and withdrawals Number of deposits and withdrawals Process other transactions Number of other transactions 154,000 52,000 Print Done Resource Activity Open new accounts Tellers Retail sales managers Allocated cost $ 18,000 42,000 $ 60,000 Resource Allocated cost Total traceable cost Activity Process deposits and withdrawals $ Tellers Retail sales managers Managing officers 234,000 42,000 5,500 $ 281,500 Allocated cost Total traceable cost Activity Process other transactions $ 36,000 Resource Tellers Retail sales managers Managing officers 56,000 38,500 $ 130,500 Total traceable cost Of the 2,500 customers of the branch, only 300 are local businesses. The business-customer class generated 50 new accounts, 83,000 deposits and withdrawals, and 25,000 other transactions. The implementation of ABC at all branches of ASSB provided sufficient data for internal benchmarking. The following are the lowest activity costs among all branches implementing two-stage ABC systems: Activity Open new account Process deposits and withdrawals Process other transactions Customer Class Lowest Activity Cost per Driver Unit $83.05 per new account $1.18 per deposit or withdrawal $2.29 per transaction Lowest Customer Cost per Account Retail $99.48 Commercial $676.34 % E4-43 (similar to) Question Help The Cedar Park branch of Austin State Savings Bank (ASSB) is a retail branch in a rapidly growing residential area. It services individuals and local businesses. To support its services, the branch employs 14 tellers, 3 retail sales managers (RSM), and the branch managing officer. The branch services about 2,500 customers. Each of the 70 branches of ASSB is implementing ABC in order to improve profitability. ASSB's branch managing officers have been given the responsibility to implement activity-based costing. The managing officer at the Cedar Park branch decided to implement a two-stage ABC system. The following process map depicts its two-stage ABC system. Click the icon to view the process map.) The results of the ABC study are summarized in the "Internal Activity Analysis": E: (Click the icon to view the internal activity analysis.) E: (Click the icon to view the cost data for the last year.) A part of the activity analysis conducted at the Cedar Park branch of Austin State Savings Bank (ASSB) 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: (Click the icon to view the cost driver data.) (Click the icon to view the calculation of traceable costs.) (Click the icon to view the benchmarking data.) Read the requirements. DIVULUMTIL New accounts $ 580 $ 103.4483 60,000 281,500 Deposits and withdrawals $ 1 154,000 $ 1.8279 Other transactions $ 130,500 / 52,000 $ 2.5096 Next, compute the total account cost for each customer class. (Round your answers to the nearest whole dollar.) Retail New accounts Process deposits and withdrawals Process other transactions Total cost Next, compute the total account cost for each customer class. (Round your answers to the nearest whole dollar.) Retail Commercial New accounts $ Process deposits and withdrawals Process other transactions $ Total cost Determine the allocated (indirect) cost per account for retail and commercial accounts. (Round your answers to two decimal places.) Total cost Number of accounts - Cost per account Retail customers $ - $ Commercial customers $ $ Data Table All employees have been interviewed as part of the ABC study. For example, tellers were asked how they spent their time. Three major activities were identified. They said that they spent most of their time (65%) processing deposits and withdrawals. They also estimated that they spent about 5% of their time processing new accounts and about 10% of their time processing other transactions. The remaining 20% of their time was spent on all other banking activities. The results of the interviews are presented in the following table: Internal Activity Analysis Process All Other Open New Deposits and Process Other Banking Accounts Withdrawals Transactions Activities Total Teller wages 5% 65% 10% 20% 100% Retail sales 15% 15% 20% 50% 100% manager salary Managing officer 0% 5% 35% 60% 100% salary The Cedar Park branch has the following cost data for the last year. Teller wages $ 360,000 RSM salaries and benefits 280,000 Managing officer salary and benefits 110,000 Other bank costs 470,000 $ Total 1,220,000 The "other bank costs" include depreciation on the facility including furniture, building, equipment, insurance, rentals of computers, contracted computer services, telecommunications, and utilities. These costs cannot be directly or indirectly related to routine bank activities, such as processing new accounts or processing deposits or withdrawals, and, thus, are unallocated. There are no costs that can be traced directly to customers so the Cedar Park branch has just two types of costs-indirect and unallocated. Print Done Annual Flow of Cost Driver 580 Activity Cost Driver Process new accounts Number of new accounts Process deposits and withdrawals Number of deposits and withdrawals Process other transactions Number of other transactions 154,000 52,000 Print Done Resource Activity Open new accounts Tellers Retail sales managers Allocated cost $ 18,000 42,000 $ 60,000 Resource Allocated cost Total traceable cost Activity Process deposits and withdrawals $ Tellers Retail sales managers Managing officers 234,000 42,000 5,500 $ 281,500 Allocated cost Total traceable cost Activity Process other transactions $ 36,000 Resource Tellers Retail sales managers Managing officers 56,000 38,500 $ 130,500 Total traceable cost Of the 2,500 customers of the branch, only 300 are local businesses. The business-customer class generated 50 new accounts, 83,000 deposits and withdrawals, and 25,000 other transactions. The implementation of ABC at all branches of ASSB provided sufficient data for internal benchmarking. The following are the lowest activity costs among all branches implementing two-stage ABC systems: Activity Open new account Process deposits and withdrawals Process other transactions Customer Class Lowest Activity Cost per Driver Unit $83.05 per new account $1.18 per deposit or withdrawal $2.29 per transaction Lowest Customer Cost per Account Retail $99.48 Commercial $676.34