has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far to show how those costs are related to the various services provided by the bank. The operations vice president has asked your help in conducting an activity-based 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 has submitted the following cost data for last year: Teller wages Assistant branch manager salary Branch manager salary Total $ 157,000 63,000 89,000 $ 309,000 Virtually all other costs of the branch-rent, depreciation, utilities, and so on--are organization-sustaining 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 have been interviewed concerning how their time was distributed last year across the activities included in the activity-based costing study. The results of those interviews appear below: Distribution of Resource Consumption Across Activities Processing Other Teller wages Opening Accounts 4% Processing Deposits and Withdrawals 67% Assistant branch manager salary Branch manager salary 12% 4% 17% 0% Customer Transactions 20% 28% 17% Other Activities 9% Totals 100% 43% 100% 79% 100% The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year: Activit Assistant branch manager salary Teller wages Branch manager salary Distribution of Resource Consumption Across Activities Processing Other Customer Opening Processing Deposits Accounts and Withdrawals 4% 67% 12% 4% 17% 0% Transactions Other Activities Totals 20% 9% 100% 28% 43% 100% 17% 79% 100% The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year: Activity Opening accounts Processing deposits and withdrawals Processing other customer transactions Total Activity at the Westfield Branch 190 new accounts opened 48,000 deposits and withdrawals processed 1,150 other customer transactions processed Required: 1. Compute the activity rates for the activity-based costing system. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Opening accounts per account opened Processing deposits and withdrawals Processing other customer transactions per deposit or withdrawal per other customer transaction S Exercise 7-13 (Algo) Computing ABC Product Costs [LO7-3, LO7-4] Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Hubs Sprockets Unit 0.80 0.40 Annual Production 20,000 units 57,000 units Additional information about the company follows: a. Hubs require $24 in direct materials per unit, and Sprockets require $19. b. The direct labor wage rate is $14 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) Estimated Overhead Cost Hubs Activity Sprockets Total $ 28,080 $ 196,000 $ 312,400 130 4,900 104 o 234 4,900 NA NA NA General factory (organization-sustaining) Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below. Hiram's Lakeside is a popular restaurant located on Lake Washington in Seattle. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. The intern, in consultation with the owner, identified three major activities and then completed the first-stage allocations of costs to the activity cost pools. The results appear below. Activity Cost Pool Serving a party of diners Serving a diner Serving drinks Activity Measure Number of parties served Number of diners served Number of drinks ordered Total Cost $ 16,240 $ 112,240 $ 33,170 Total Activity 5,600 parties 12,200 diners 10,700 drinks The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top- management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. She knew that the total cost for the month (including organization-sustaining costs) was $180,000 and that 12,000 diners had been served. Therefore, the average cost per diner was $15. Required: 1&2. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties of diners? (Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places.) a. A party of six diners who order five drinks in total. b. A party of three diners who do not order any drinks. c. A party of one diner who orders four drinks. Total Cost Average Cost per diner per diner per diner