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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 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 At practical capacity, Golding uses 25,000 check processing hours. Driver No. of accounts No. of statements No. of transactions No. of inquiries Time per Unit Traditional Interest-Bearing of Activity Account Account 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. 2,000 60,000 160,000 1,500 1,000 10,000 120,000 1,500

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 At practical capacity, Golding uses 25,000 check processing hours. Driver No. of accounts No. of statements No. of transactions No. of inquiries Time per Unit Traditional Interest-Bearing of Activity Account Account 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. 2,000 60,000 160,000 1,500 1,000 10,000 120,000 1,500

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: Time per Unit of Activity Resources Supervision Phone and supplies Salaries Computer Total Required: $70,000 Processing accounts 90,000 Issuing statements 275,000 Processing transactions 25,000 Answering customer inquiries $460,000 At practical capacity, Golding uses 25,000 check processing hours. $ X Activities 3.68 1.84 0.92 Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts Issuing statements 2.76 Driver per account No. of accounts per statement No. of statements No. of transactions No. of inquiries 1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. per hour 18.4 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. Traditional Account 2,000 60,000 160,000 1,500 Interest-Bearing Account 1,000 10,000 120,000 Processing transactions per transaction Answering inquiries 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 $ 1,500
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 of Activity Resources Supervision Phone and supplies Salaries Computer Total Required: $70,000 Processing accounts 90,000 Issuing statements 275,000 Processing transactions 25,000 Answering customer inquiries $460,000 At practical capacity, Golding uses 25,000 check processing hours. $ X Activities 3.68 1.84 0.92 Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts Issuing statements 2.76 Driver per account No. of accounts per statement No. of statements No. of transactions No. of inquiries 1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent. per hour 18.4 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. Traditional Account 2,000 60,000 160,000 1,500 Interest-Bearing Account 1,000 10,000 120,000 Processing transactions per transaction Answering inquiries 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 $ 1,500
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