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Simplifying the ABC System: TDABC Golding Bank provided the following data about its resources and activities for its checking account process: Resources Activities Time per
Simplifying the ABC System: TDABC Golding Bank provided the following data about its resources and activities for its checking account process: Resources Activities Time per Unit Activity Driver Supervision $62,000 Processing accounts 0.20 hr. No. of accounts Phone and supplies 76,000 Issuing statements 0.10 hr. No. of statements Salaries 402,000 Processing transactions 0.05 hr. No. of transactions Computer 20,000 Answering customer inquiries 0.15 hr. No. of inquiries Total 560,000 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 Processing transactions $ per transaction Answering inquiries $ per inquiry If the total number of statements issued was 20,000, 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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