Golding Bank provided the following data about its resources and activities for its checking account process: Time per Unit Traditional Interest-Bearing Resources Activities Driver of Activity Account Account Supervision Phone and supplies Salaries No. of accounts No. of statements $70,000 Processing accounts 0.20 hr. 2,000 1,000 90,000 Issuing statements 0.10 hr. 60,000 10,000 275,000 Processing transactions No. of transactions 0.05 hr. 160,000 120,000 25,000 Answering customer inquiries No. of inquiries 1,500 Computer 0.15 hr. 1,500 Total $460,000 at practical capacity, Golding uses 25,000 check processing hours. Required: 1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. 18.4 v per hour Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts 3.68 v per account Issuing statements 1.84 V per statement Processing transactions Answering inquiries 0.92 v per transaction 2.76 v per inquiry 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 s 18.40 x 3. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 9.20(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. 18.40 X
Golding Bank provided the following data about its resources and activities for its checking account process: Time per Unit Traditional Interest-Bearing Resources Activities Driver of Activity Account Account Supervision Phone and supplies Salaries No. of accounts No. of statements $70,000 Processing accounts 0.20 hr. 2,000 1,000 90,000 Issuing statements 0.10 hr. 60,000 10,000 275,000 Processing transactions No. of transactions 0.05 hr. 160,000 120,000 25,000 Answering customer inquiries No. of inquiries 1,500 Computer 0.15 hr. 1,500 Total $460,000 at practical capacity, Golding uses 25,000 check processing hours. Required: 1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. 18.4 v per hour Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts 3.68 v per account Issuing statements 1.84 V per statement Processing transactions Answering inquiries 0.92 v per transaction 2.76 v per inquiry 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 s 18.40 x 3. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 9.20(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. 18.40 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Simplifying the ABC System: TDABC
Golding Bank provided the following data about its resources and activities for its checking account process:
Time per Unit Traditional Interest-Bearing
Resources
Activities
Driver
of Activity
Account
Account
Supervision
$70,000 Processing accounts
No. of accounts
0.20 hr.
2,000
1,000
Phone and supplies
90,000 Issuing statements
No. of statements
0.10 hr.
60,000
10,000
Salaries
275,000 Processing transactions
No. of transactions
0.05 hr.
160,000
120,000
Computer
25,000 Answering customer inquiries
No. of inquiries
0.15 hr.
1,500
1,500
Total
$460,000
At practical capacity, Golding uses 25,000 check processing hours.
Required:
1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent.
18.4 V per hour
Calculate the activity rates for the four activities. Round your answers to the nearest cent.
Processing accounts
3.68 V per account
Issuing statements
1.84V per statement
Processing transactions
0.92 V per transaction
Answering inquiries
2.76V per inquiry
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 $
18.40 x
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) V
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.
18.40 X
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