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	$60,000		Processing accounts	0.20 hr.		No. of accounts
Phone and supplies	74,000		Issuing statements	0.10 hr.		No. of statements
Salaries	400,000		Processing transactions	0.05 hr.		No. of transactions
Computer	26,000		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. $fill in the blank 1 per hour

2. Calculate the activity rates for the four activities. Round your answers to the nearest cent.

Processing accounts	$fill in the blank 2 per account
Issuing statements	$fill in the blank 3 per statement
Processing transactions	$fill in the blank 4 per transaction
Answering inquiries	$fill in the blank 5 per inquiry

If the total number of statements issued was 18,000, calculate the cost of the issuing statements activity. $fill in the blank 6

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.

$fill in the blank 7 per hour

Update all the activity rates for these changes in operating conditions.

Processing accounts	$fill in the blank 8 per account
Issuing statements	$fill in the blank 9 per statement
Processing transactions	$fill in the blank 10 per transaction
Answering inquiries	$fill in the blank 11 per inquiry