Question
Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account products and their associated resources and activities: Resources
Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account products and their associated resources and activities: Resources Activities Supervision $52,000 Processing accounts 0.20 hr. Time per Unit Activity Driver No. of accounts Traditional Interest-Bearing Account Account 2,000 1,500 Phone and supplies 76,000 Issuing statements Salaries) 392,000 Processing transactions 0.10 hr. 0.05 hr. No. of statements 60,000 10,000 No. of transactions 160,000 120,000 Computer Total 20,000 Answering customer inquiries 540,000 0.15 hr. No. of inquiries 1,500 1,500 At practical capacity, Golding uses 30,000 check processing hours. Required: 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. 18 per hour I Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts 3.6 per account Issuing statements 1.8 per statement Processing transactions 0.9 per transaction Check My Work Email instructor Save and Exit Submit Assignment for Grading 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. 18 per hour Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts 3.6 per account Issuing statements 1.8 per statement Processing transactions 0.9 per transaction Answering inquiries 2.7 per inquiry If the total number of statements issued was 26,000, calculate the cost of the issuing statements activity. 46,800 2. Assuming there are 2,000 interest-bearing checking accounts, calculate the cost per account using the activity rates from Requirement 1. Round your answers to the nearest cent. Unit cost 3. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 0.20(number of accounts) +0.10(number of statements) + 0.05(number of transactions) + 0.15(number of inquiries) Again, assuming that there are 2,000 interest bearing accounts, show that the resource cost per account is the same as calculated in Requirement 2. Round your answers to the nearest cent. 4. What if process improvements decreased the number of customer inquiries leading to a 10 percent reduction in check processing hours and a $10,800 reduction in Check My Work All work saved Previous Next > Email Instructor Save and Exit Submit Assignment for Grading 3. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 0.20(number of accounts) + 0.10(number of statements) + 0.05(number of transactions) +0.15(number of inquiries) Again, assuming that there are 2,000 interest bearing accounts, show that the resource cost per account is the same as calculated in Requirement 2. Round your answers to the nearest cent. 4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $10,800 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 X per account Issuing statements S per statement Processing transactions Answering inquiries per transaction per inquiry Check My Work Check My Work Previous Next All work saved Email Instructor Save and Exit Submit Assignment for Grading
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