Simplifying the ABC System: TDABC Golding Bank provided the following data about its resources and activities for its checking account process: Resources Activities $70,000 Processing accounts 90,000 Issuing statements 275,000 Processing transactions 25,000 Answering customer inquiries $460,000 Supervision Phone and supplies Salaries Computer Total At practical capacity, Golding uses 25,000 check processing hours. Required: Driver No. of accounts No. of statements No. of transactions No. of inquiries Time per Unit Traditional Interest-Bearing of Activity Account Account 2,000 1,000 60,000 10,000 160,000 120,000 1,500 1,500 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. 1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. 18.4 ✓ per hour
Simplifying the ABC System: TDABC Golding Bank provided the following data about its resources and activities for its checking account process: Resources Activities $70,000 Processing accounts 90,000 Issuing statements 275,000 Processing transactions 25,000 Answering customer inquiries $460,000 Supervision Phone and supplies Salaries Computer Total At practical capacity, Golding uses 25,000 check processing hours. Required: Driver No. of accounts No. of statements No. of transactions No. of inquiries Time per Unit Traditional Interest-Bearing of Activity Account Account 2,000 1,000 60,000 10,000 160,000 120,000 1,500 1,500 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. 1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. 18.4 ✓ per hour
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I need help with Question 2, if possible. Thanks. Please see the question image attached.
Transcribed Image Text:Simplifying the ABC System: TDABC
Golding Bank provided the following data about its resources and activities for its checking account process:
Resources
Supervision
Phone and supplies
Salaries
Computer
Total
Activities
$70,000 Processing accounts
90,000 Issuing statements
275,000 Processing transactions
25,000 Answering customer inquiries
$460,000
Driver
No. of accounts
No. of statements
No. of transactions
No. of inquiries
Time per Unit Traditional Interest-Bearing
of Activity
0.20 hr.
Account
Account
1,000
0.10 hr.
0.05 hr.
0.15 hr.
Calculate the activity rates for the four activities. Round your answers to the nearest cent.
Processing accounts
3.68 ✓per account
Issuing statements
Processing transactions
1.84 ✔ per statement
0.92✔ per transaction
2.76 ✓ per inquiry
Answering inquiries
2,000
60,000
160,000
1,500
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
per hour
10,000
120,000
1,500
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 $
3.81 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)
✓
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.
3.81 X
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