NEAT-Trust is a new nationwide trust bank with five (5) branches across Canada. For the year 2020 NEAT-Trust has spent $1,000,000 on advertising for all its five (5) branches and has disbursed approximately $400,000 for Capital Assets per branch. Management is concerned about the cost of handling routine transactions at the Vancouver bank and wants to compare these costs at the bank's various branches. NEAT-Trust Vancouver branch has provided the following data for the year 2020: Teller salaries $260,000 Senior level salaries $130,000 Branch manager salary $100,000 All NEAT-Trust Branch accountants believe that apart from salaries and wages all other branch expenses are fixed costs and cannot be meaningfully assigned to individual customer transaction. The employees of NEAT-Trust have prepared the following table that shows how their time was distributed last year across the two activities Employee group Processing at Processing Other Total counter deposits/ Opening/ Closing non-routine Withdrawals of accounts Activities Teller Salaries 70% 20% 10% 100% Senior level Salaries 40% 30% 30% 100% Branch manager salary 10% 20% 70% 100% Transactions of Vancouver branch during 2020. Activity Total Activity at Vancouver branch Processing Deposits/Withdrawals 170,000 Deposits/Withdrawals Processing opening/closing of accounts 5,000 Opening/closing of accounts Montreal Branch is considered to be the most cost effective branch in the NEAT-Trust. The costs relating to these activities for Montreal Branch are listed below Activity Employee salary cost per Activity for Montreal Bank Processing Deposits/Withdrawals $ 1.80 per deposit/withdrawal Processing opening/closing of accounts $ 20.10 per opening/closing of accounts Required: a. Compute Vancouver branch's activity rates for processing Deposits/withdrawals, AND processing Opening/Closing accounts. Determine and explain which costs you would consider in your analysis and which costs you decided to omit. (2.5 marks) b. Compare and analyze Vancouver and Montreal Branch results. Suggest a minimum of five possible causes for the discrepancies noted for the activities resulting from data quality and operations. (2.5 marks)a. Vancouver branch's activity rates - Labour cost - Chapter 5, 6 Relevant cost Employee Processing at Processing Other Total group counter deposits Opening/ non-routine Withdrawals Closing of Activities accounts Teller 70%% 20% 10% 100% Salaries 70% 260,000 = 20% 260,000 = 10% *260,000 = $260.000 $182 000 $52,000 $26,000 Senior level 10% 30%% 30% 100% Salaries 40%*130,000 = 30% *130,000 = 30% *130,000 = $130,000 $52,000 $38,000 $39,000 Branch 10% 20% 70% 100% manager salary 10% *100,000 = 20%*100,000 = 70% *100,000= $100,000 $10,000 $20,00 0 $70,000 Activity Cost Cost Drivers Rate Employee Number of Pools (employee salaries Cost Drivers salary cost Used Per per activity Activity Deposits Withd 182 000+52,0 170.000 Processing rawals 0+10.000-$24 Deposits/Withd 4,000 rawals Opening/Closin $22.20 52,000+39,000 5,00 Processing g Accounts +20,000-$111, opening/closin OO0 g of accounts b. Comparison Employee salary cost per Activity Vancouver Montreal $1.44 $1.80 Processing Deposits,Withdrawals $22 20 $20.10 Processing opening/closing of accounts