Happy Banking Company has ten automatic teller machines (ATM) spread throughout the city maintained by the ATM Department. You have been assigned the task of determining the cost of operating each machine. Management will use the information you develop to evaluate the desirability of continuing to operate each machine andor changing security arrangements for a particular machine. The ATM Department consist of a total of six employees a supervisor, a head cashier, two associate cashiers, and two maintenance personnel. The associate cashiers make between two and four daily trips to each machine to collect and replenish cash and to replenish supplies, deposit tickets and so forth. Each machine contains a small computer that automatically summarizes and reports transactions to the head cashier. The head cashier reconciles the activities of the two associate cashiers to the computerized reports. The supervisor, who does handle cash, reviews the reconciliation. When an automatic teller's computer, a customer, or a cashier reports a problem, the two maintenance employees and one cashier are dispatched immediately. The cashier removes all cash and transaction records, and the maintenance employees repair the machine. Monthly operating costs and information on percentage of time that used in activities for a recent month follows Routine Trip Related Activity Operating costs: percentage Supervisor Salary $4,970 60% Head cashier Salary 4,200 75% Associate cashiers Salary ($1,800 each Assoc cashier) 3,600 50% Maintenance workers salary ($1,800 each Maintenance worker) 3,600 Cashiers service vehicle-used for Routine trips 1,500 100% Maintenance service vehicle-used for maintenance activities 1,544 Office rent and utilities-used equally preparing for routine and maintenance a 2,436 50% Machine lease, space rent, and utilities ($1,700 each machine) 17,000 Total operating cost for month $38,850 Maintenance related activities percentage 40% 25% 50% 100% 100% 50% Related monthly activity information for this month follows: Routine Maintenance Machine Trips Hours 30 VOULUN 888888888 710 Additional Information follows: 1. The office is centrally located with about equal travel time to each machine 2. Maintenance hours include travel time. 3. The cashiers service vehicle is used exclusively for routine visits. Required-Answer the following questions in the area below each question. I have tried to set up some structure in some of the analysis in the solution area below. ONLY AN SWER QUESTIONS (A, D, & E) a. Determine the monthly operating costs of a machine when cost assignments are based on the number of machines. Conceptually this is like the plantwide overheadrate per unit. Hint: Do not make this complicated, since you are given the total overhead cost and know there are 10 machines b. You have detemined that ABC would be a more effective costing method. You have decided to split the costs into 3 adivities: Routine trip, maintenance, and machine lease-space rent-utilities. Develop an analysis to determine the activity rates for each of the 3 activities. Round answers to the nearest cent. Trips Supervisor Salary Head cashier Salary Associate cashiers Salary ($1,800 each Assoc cashier) Maintenance workers salary ($1,800 each Maintenance worker) Cashiers service vehicle-used for Routine trips Maintenance service vehicle-used for maintenance activities Office rent and utilities-used equally preparing for routine and maintenance activities Machine lease, space rent, and utilities ($1,700 each machine) Total per activity Quantity of activity Unit adivity rates Machine lease, Routine space rent and Maintenance utilities Total $2,982 $1,988 $4,970 3150 1050 $4,200 1800 1800 $3,600 3600 $3,600 1,500 $1,500 1,544 $1,544 1218 1218 $2,436 17,000 $17,000 $10,650 $11,200 $17,000 $38,850 710 160 $15.00 $70.00 0 c. Determine the operating costs assigned to each machine when activity-based costing is used Related monthly activity information for this month follows: Maintena nce Machine Routine Trips Hours Total WN $900 WN Machine Routine Trips Maintenance $450 $350 $1,350 $1,190 $1,050 $900 $2,100 $1,800 $1,050 $450 $700 $1,350 $1,750 $1,800 $350 $900 $1,400 $750 $1,260 Total ] $10,650 $11,200 Machine lease, space rent, and utilities $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $17,000 $2,500 $4,240 $3,650 $4,700 $4,550 $2,850 $4,800 $3,850 $4,000 $3,710 co O Occo O d How can ABC cost information by used by this banking company to improve overall management of monthly operating costs? Use the text box to type in your detailed response. You need to include a reference other than the textbook to support your comments. e. What if Machine 10 information was incorrect and instead of 50 routine trips it was 56 routine trips, what happens to the cost of all the machines? Comment on the change. To complete part E, you should copy your completed Part 1 solution worksheet within this workbook and rename the worksheet Part 1 E. You should only need to update the routine trips for machine E to determine the new cost structure, since your Part 1 E should have all the cell references, so once you change the routine trips the solution should automatically change and you should comment on the change on Part 1E. Happy Banking Company has ten automatic teller machines (ATM) spread throughout the city maintained by the ATM Department. You have been assigned the task of determining the cost of operating each machine. Management will use the information you develop to evaluate the desirability of continuing to operate each machine andor changing security arrangements for a particular machine. The ATM Department consist of a total of six employees a supervisor, a head cashier, two associate cashiers, and two maintenance personnel. The associate cashiers make between two and four daily trips to each machine to collect and replenish cash and to replenish supplies, deposit tickets and so forth. Each machine contains a small computer that automatically summarizes and reports transactions to the head cashier. The head cashier reconciles the activities of the two associate cashiers to the computerized reports. The supervisor, who does handle cash, reviews the reconciliation. When an automatic teller's computer, a customer, or a cashier reports a problem, the two maintenance employees and one cashier are dispatched immediately. The cashier removes all cash and transaction records, and the maintenance employees repair the machine. Monthly operating costs and information on percentage of time that used in activities for a recent month follows Routine Trip Related Activity Operating costs: percentage Supervisor Salary $4,970 60% Head cashier Salary 4,200 75% Associate cashiers Salary ($1,800 each Assoc cashier) 3,600 50% Maintenance workers salary ($1,800 each Maintenance worker) 3,600 Cashiers service vehicle-used for Routine trips 1,500 100% Maintenance service vehicle-used for maintenance activities 1,544 Office rent and utilities-used equally preparing for routine and maintenance a 2,436 50% Machine lease, space rent, and utilities ($1,700 each machine) 17,000 Total operating cost for month $38,850 Maintenance related activities percentage 40% 25% 50% 100% 100% 50% Related monthly activity information for this month follows: Routine Maintenance Machine Trips Hours 30 VOULUN 888888888 710 Additional Information follows: 1. The office is centrally located with about equal travel time to each machine 2. Maintenance hours include travel time. 3. The cashiers service vehicle is used exclusively for routine visits. Required-Answer the following questions in the area below each question. I have tried to set up some structure in some of the analysis in the solution area below. ONLY AN SWER QUESTIONS (A, D, & E) a. Determine the monthly operating costs of a machine when cost assignments are based on the number of machines. Conceptually this is like the plantwide overheadrate per unit. Hint: Do not make this complicated, since you are given the total overhead cost and know there are 10 machines b. You have detemined that ABC would be a more effective costing method. You have decided to split the costs into 3 adivities: Routine trip, maintenance, and machine lease-space rent-utilities. Develop an analysis to determine the activity rates for each of the 3 activities. Round answers to the nearest cent. Trips Supervisor Salary Head cashier Salary Associate cashiers Salary ($1,800 each Assoc cashier) Maintenance workers salary ($1,800 each Maintenance worker) Cashiers service vehicle-used for Routine trips Maintenance service vehicle-used for maintenance activities Office rent and utilities-used equally preparing for routine and maintenance activities Machine lease, space rent, and utilities ($1,700 each machine) Total per activity Quantity of activity Unit adivity rates Machine lease, Routine space rent and Maintenance utilities Total $2,982 $1,988 $4,970 3150 1050 $4,200 1800 1800 $3,600 3600 $3,600 1,500 $1,500 1,544 $1,544 1218 1218 $2,436 17,000 $17,000 $10,650 $11,200 $17,000 $38,850 710 160 $15.00 $70.00 0 c. Determine the operating costs assigned to each machine when activity-based costing is used Related monthly activity information for this month follows: Maintena nce Machine Routine Trips Hours Total WN $900 WN Machine Routine Trips Maintenance $450 $350 $1,350 $1,190 $1,050 $900 $2,100 $1,800 $1,050 $450 $700 $1,350 $1,750 $1,800 $350 $900 $1,400 $750 $1,260 Total ] $10,650 $11,200 Machine lease, space rent, and utilities $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $17,000 $2,500 $4,240 $3,650 $4,700 $4,550 $2,850 $4,800 $3,850 $4,000 $3,710 co O Occo O d How can ABC cost information by used by this banking company to improve overall management of monthly operating costs? Use the text box to type in your detailed response. You need to include a reference other than the textbook to support your comments. e. What if Machine 10 information was incorrect and instead of 50 routine trips it was 56 routine trips, what happens to the cost of all the machines? Comment on the change. To complete part E, you should copy your completed Part 1 solution worksheet within this workbook and rename the worksheet Part 1 E. You should only need to update the routine trips for machine E to determine the new cost structure, since your Part 1 E should have all the cell references, so once you change the routine trips the solution should automatically change and you should comment on the change on Part 1E