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 S70,000 Processing accounts No. of accounts 0.20 hr. 2,000 1,000 Phone and supplies S0,000 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. af 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. 18.4V per haur 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 inguiries 2.76V per inquiry 2. Assuming there are 2,000 interest-bearing checking accounts, calculate the cost per account using the activity retes from Requirement 1. Round your answers to the nearest cent. Unit cost $ 36,800 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. accounts) + 0.10( number of statements) + 0.05(number of transactions) + 0.15(number of inquiries) 0.20(number 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. $ 22,500 x 4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $10,000 reduction in total resource costs? Calculate the capacity cost rate for the checking account process. 20 V per haur
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 S70,000 Processing accounts No. of accounts 0.20 hr. 2,000 1,000 Phone and supplies S0,000 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. af 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. 18.4V per haur 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 inguiries 2.76V per inquiry 2. Assuming there are 2,000 interest-bearing checking accounts, calculate the cost per account using the activity retes from Requirement 1. Round your answers to the nearest cent. Unit cost $ 36,800 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. accounts) + 0.10( number of statements) + 0.05(number of transactions) + 0.15(number of inquiries) 0.20(number 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. $ 22,500 x 4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $10,000 reduction in total resource costs? Calculate the capacity cost rate for the checking account process. 20 V per haur
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Prncessing transactions
No, of transactions
0.05 hr.
160,000
120,000
Computer
25.000 Answering customer inquiries
No. af 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 haur
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
0.92 V per transaction
Answering inquiries
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 $ 36,800 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.
$ 22,500X
4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $10,000 reduction in total resource costs? Calculate the capacity cost rate for the checking account process.
20 V per haur
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