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The operations vice president of Security Home Bank has been interested in investigating the efficiency ofthe bank's operations. She has been particularly concerned about the
The operations vice president of Security Home Bank has been interested in investigating the efficiency ofthe 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. lfthe branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank maintains meticulous records ofwages 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 Iwrestfield branch of Security Home Etank has submitted the following cost data for last year: Teller wages $ 153,666 Assistant branch manager salary ?2,666 Branch manager salary 93,666 Total $ 318,666 [ Virtually all other costs ofthe branchrent, 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 Processing Processing Other Opening Deposits and Customer Other Accounts withdrawals Transactions Activities Totals Teller wages 5% ?6% 15% 9% 166% Assistant branch manager salary 16% 14% 36% 46% 166% Branch manager salary 5% 6% 18% ??% 166% The manager ofthe Westfield branch of Security Home Bank has provided the following data concerning the transactions ofthe branch during the past year: Activity Total Activity at the Nestfield Branch Opening accounts 266 new accounts opened Processing deposits and withdrawals 45,566 deposits and withdrawals processed Processing other customer transactions 856 other customer transactions processed I Required: 1. Compute the activity rates for the activitybased costing system. [Round your answers to 2 decimal places.) Opening accounts _ per account opened Processing deposits and withdrawals _ per deposit or withdrawal Processing other customer transactions _ per other customer transaction
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