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Exercise 7 - 8 ( Algo ) Computing and Interpreting Activity Rates [ LO 7 - 3 ] The operations vice president of Security Home
Exercise Algo Computing and Interpreting Activity Rates LO
The operations vice president of Security Home Bank is investigating the efficiency of the banks operations. She is concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the banks various branches. If the branches with the most efficient operations can be identified, their methods can be studied and replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt to show how those costs are related to the various services provided by the bank. The operations vice president has asked for your help in conducting an activitybased costing study of bank operations. In particular, she would like to know the cost of opening an account, the cost of processing deposits and withdrawals, and the cost of processing other customer transactions.
The Westfield branch of Security Home Bank submitted the following cost data for last year:
Teller wages $
Assistant branch manager salary
Branch manager salary
Total $
Virtually all other costs of the branchrent depreciation, utilities, and so onare organizationsustaining costs that cannot be meaningfully assigned to individual customer transactions such as depositing checks.
In addition to the cost data above, the employees of the Westfield branch were interviewed concerning how their time was distributed last year across the activities included in the activitybased costing study. The results of those interviews appear below:
Distribution of Resource Consumption Across Activities
Opening Accounts Processing Deposits and Withdrawals Processing Other Customer Transactions Other Activities Totals
Teller wages
Assistant branch manager salary
Branch manager salary
The manager of the Westfield branch of Security Home Bank provided the following data concerning the branch's transactions during the past year:
Activity Total Activity at the Westfield Branch
Opening accounts new accounts opened
Processing deposits and withdrawals deposits and withdrawals processed
Processing other customer transactions other customer transactions processed
Required:
Compute the activity rates for the activitybased costing system.
Note: Round your answers to decimal places.
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