he operations vice president of Security Home Bank has been interested in investigating the efficiency of the bank's operations. She as been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at he bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and hen replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far o show how those costs are related to the various services provided by the bank. The operations vice president has asked your help conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account, he 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: $ 158,000 64,000 86,000 $ 308,000 Teller wages Assistant branch manager salary Branch manager salary Total Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are organization-sustaining costs that cannot be heaningfully assigned to individual customer transactions such as depositing checks. addition to the cost data above, the employees of the Westfield branch have been interviewed concerning how their time was

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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:
Skipped
Teller wages
Assistant branch manager salary
Branch manager salary
Total
$ 158,000
64,000
86,000
$ 308,000
Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are 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
Deposits and
Withdrawals
Opening
Accounts
Processing Other
Customer
Transactions
Other
Activities
Totals
Transcribed Image Text:4 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: Skipped Teller wages Assistant branch manager salary Branch manager salary Total $ 158,000 64,000 86,000 $ 308,000 Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are 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 Deposits and Withdrawals Opening Accounts Processing Other Customer Transactions Other Activities Totals
4
Skipped
Mc
Graw
Hill
Teller wages
Assistant branch manager salary.
Branch manager salary
Activity
Opening accounts
Opening
Accounts
4%
Processing deposits and withdrawals
Processing other customer transactions.
Distribution of Resource Consumption Across Activities
Processing
Deposits and
Withdrawals
71%
15%
0%
14%
4%
Activity Cost Pool
Opening accounts
Processing deposits and withdrawals
Processing other customer transactions
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:
Processing Other
Customer
Transactions
20%
29%
16%
Total Activity at the Westfield Branch
220 new accounts opened
Activity Rate
54,500 deposits and withdrawals processed
950 other customer transactions processed
Required:
1. Compute the activity rates for the activity-based costing system. (Round your answers to 2 decimal places.)
per account opened
per deposit or withdrawal
per other customer transaction
< Prev
4 of 4
Other
Activities
5%
42%
80%
HHH
HH
Next >
Totals
100%
100%
100%
Transcribed Image Text:4 Skipped Mc Graw Hill Teller wages Assistant branch manager salary. Branch manager salary Activity Opening accounts Opening Accounts 4% Processing deposits and withdrawals Processing other customer transactions. Distribution of Resource Consumption Across Activities Processing Deposits and Withdrawals 71% 15% 0% 14% 4% Activity Cost Pool Opening accounts Processing deposits and withdrawals Processing other customer transactions 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: Processing Other Customer Transactions 20% 29% 16% Total Activity at the Westfield Branch 220 new accounts opened Activity Rate 54,500 deposits and withdrawals processed 950 other customer transactions processed Required: 1. Compute the activity rates for the activity-based costing system. (Round your answers to 2 decimal places.) per account opened per deposit or withdrawal per other customer transaction < Prev 4 of 4 Other Activities 5% 42% 80% HHH HH Next > Totals 100% 100% 100%
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