Problem 11-23A (Algo) Context-sensitive nature of cost behavior classifications LO 11-1, 11-2 Fanning Bank's start-up division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $93,000 per year. The three tellers combined can process up to 85,000 customer transactions per year. If a branch does not attain a volume of at least 55,000 transactions during its first year of operations, it is closed. If the demand for services exceeds 85,000 transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations. Required a. What is the relevant range of activity for new branch banks? b. Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 55,000, 65,000, 75,000, or 85,000 transactions. In this case (the activity base is the number of transactions for a spegific branch), is the teller cost a fixed or a variable cost? c. Determine the amount of teller cost in total and the average teller cost per branch for Fanning Bank, assuming that the start-up division operates 20, 25, 30 or 35 branches. In this case (the activity base is the number of branches), is the teller cost a fixed or a variable cost? Complete this question by entering your answers in the tabs below. Required A Required B Required C Complete this question by entering your answers in the tabs below. Required A Required B Required c What is the relevant range of activity for new branch banks? (Enter the lower end of the relevant range first.) The relevant range is transactions. Required Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 55,000, 65,000, 75,000, or 85,000 transactions. In this case the activity base is the number of transactions for a specific branch), is the teller cost a fixed or a variable cost? (Round "Average per unit teller cost" to 2 decimal places.) No. of Transactions 55,000 65,000 75,000 85,000 Total teller cost Average per unit teller cost The teller cost is a Complete this question by entering your answers in the tabs below. Required A Required B Required Determine the amount of teller cost in total and the average teller cost per branch for Fanning Bank, assuming that the start- up division operates 20, 25, 30 or 35 branches. In this case (the activity base is the number of branches), is the teller cost a fixed or a variable cost? 20 35 25 30 No. of Branches Teller costs per branch Total taller cost The toller cost is a
