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Simplifying the ABC System: TDABC Activity Driver No. of accounts Golding Bank provided the following data about its resources and activities for its checking account
Simplifying the ABC System: TDABC Activity Driver No. of accounts Golding Bank provided the following data about its resources and activities for its checking account process: Resources Activities Time per Unit Supervision $62,000 Processing accounts 0.20 hr. Phone and supplies 88,000 Issuing statements 0.10 hr. Salaries 388,000 Processing transactions 0.05 hr. Computer 22,000 Answering customer inquiries 0.15 hr. Total 560,000 No. of statements No. of transactions No. of inquiries Total check processing hours 28,000 (practical capacity) Required: 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. per hour 2. Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts per account Issuing statements per statement III Processing transactions per transaction Answering inquiries per inquiry If the total number of statements issued was 16,000, calculate the cost of the issuing statements activity. 3. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $15,680 reduction in total resource costs? Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. per hour Update all the activity rates for these changes in operating conditions. Processing accounts $ per account Issuing statements $ per statement Processing transactions $ per transaction Answering inquiries $ per inquiry
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