Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The operations vice president of Security Home Bank has been interested in investigating the efficiency of the bank's operations. She has been particularly concerned

image text in transcribed

The operations vice president of Security Home Bank has been interested in investigating the efficiency 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 various branches. If the branches with the most efficient operations can be identified, their methods can be studied 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 various services provided by the bank. The operations vice president has asked your help in conducting an activity-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 Security Home Bank has submitted the following cost data for last year: Teller wages Assistant branch manager salary Branch manager salary Total $ 150,000 66,000 86,000 $ 302,000 Virtually all other costs of the branch-rent, depreciation, utilities, and so onare organization-sustaining costs that cannot be meaningfully assigned to individual customer transactions such as depositing checks. In addition to the cost data above, the employees of the Westfield branch have been interviewed concerning how their time was distributed last year across the activities included in the activity-based costing study. The results of those interviews appear below: Distribution of Resource Consumption Across Activities Opening Accounts Teller wages 3% Assistant branch manager salary 9% Branch manager salary 3% Processing Deposits and Withdrawals 68% 19% 0% Processing Other Customer Transactions 17% 22% 16% Other Activities Totals 12% 100% 50% 100% 81% 100% The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year: Activity Opening accounts Processing deposits and withdrawals Processing other customer transactions Required: Total Activity at the Westfield Branch 255 new accounts opened 49,000 deposits and withdrawals processed 1,450 other customer transactions processed 1. Compute the activity rates for the activity-based costing system. (Round your answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Management Accounting

Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta

16th edition

978-0133058819, 9780133059748, 133058816, 133058786, 013305974X , 978-0133058789

More Books

Students also viewed these Accounting questions

Question

a. What department offers the course?

Answered: 1 week ago

Question

What is the purpose of evaluating the projects MOV? AppendixLO1

Answered: 1 week ago