Q 1:

Question 2

The operations vice president of Securlty Home Bank has been Interested In Investigating the efficlency of the bank's operations. She 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 varlous branches. If the branches with the most efficlent operations can be identified, thelr methods can be studled 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 varlous services provided by the bank. The operations vice president has asked your help In conducting an actlvity-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 Securlty Home Bank has submitted the following cost data for last year: Virtually all other costs of the branch-rent, depreclation, utillties, and so on-are organization-sustaining costs that cannot be meaningfully assigned to Indlvidual customer transactions such as depositing checks. In addition to the cost data above, the employees of the Westfield branch have been Intervlewed concerning how thelr time was distributed last year across the activitles Included In the actlvity-based costing study. The results of those Intervlews appear below: The manager of the Westfield branch of Securlty Home Bank has provided the following data concerning the transactions of the branch during the past year: Requlred: 1. Compute the actlvity rates for the actlvity-based costing system. (Round your answers to 2 decimal places.) Thermal RIsing, Incorporated, makes paragliders for sale through speclalty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed an actlvity-based costing system with the following actlvity cost pools and actlvity rates: Management would IIke an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: The company's direct labor rate is $20 per hour. Requlred: Using the company's actlvity-based costing system, compute the customer margin of Big Sky Outfitters. (Round your Intermedlate calculations and final answer to the nearest whole dollar amount. Loss amounts should be entered with a minus sign.)