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Simplifying the ABC System: TDABC Golding Bank provided the following data about its resources and activities for its checking account process: Resources           Activities Time per Unit         Activity Driver Supervision $68,000         Processing accounts 0.20 hr.         No. of accounts Phone and supplies 84,000         Issuing statements 0.10 hr.         No. of statements Salaries 188,000         Processing transactions 0.05 hr.         No. of transactions Computer 20,000         Answering customer inquiries 0.15 hr.         No. of inquiries        Total 360,000                       Total check processing hours 20,000             (practical capacity)           Required:

Simplifying the ABC System: TDABC Golding Bank provided the following data about its resources and activities for its checking account process: Resources           Activities Time per Unit         Activity Driver Supervision $68,000         Processing accounts 0.20 hr.         No. of accounts Phone and supplies 84,000         Issuing statements 0.10 hr.         No. of statements Salaries 188,000         Processing transactions 0.05 hr.         No. of transactions Computer 20,000         Answering customer inquiries 0.15 hr.         No. of inquiries        Total 360,000                       Total check processing hours 20,000             (practical capacity)           Required:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Simplifying the ABC System: TDABC

Golding Bank provided the following data about its resources and activities for its checking account process:

Resources           Activities Time per Unit         Activity Driver
Supervision $68,000         Processing accounts 0.20 hr.         No. of accounts
Phone and supplies 84,000         Issuing statements 0.10 hr.         No. of statements
Salaries 188,000         Processing transactions 0.05 hr.         No. of transactions
Computer 20,000         Answering customer inquiries 0.15 hr.         No. of inquiries
       Total 360,000                      
Total check processing
hours		 20,000          
  (practical capacity)          

Required:

1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. per hour 2. Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts per account Issuing statements per statement Processing transactions per transaction Answering inquiries per inquiry If the total number of statements issued was 26,000, calculate the cost of the issuing statements activity. 3. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $7,200 reduction in total resource costs? Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. per hour Update all the activity rates for these changes in operating conditions. Processing accounts per account Issuing statements %$4 per statement Processing transactions per transaction Answering inquiries per inquiry
Transcribed Image Text:1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. per hour 2. Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts per account Issuing statements per statement Processing transactions per transaction Answering inquiries per inquiry If the total number of statements issued was 26,000, calculate the cost of the issuing statements activity. 3. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $7,200 reduction in total resource costs? Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. per hour Update all the activity rates for these changes in operating conditions. Processing accounts per account Issuing statements %$4 per statement Processing transactions per transaction Answering inquiries per inquiry
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