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Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account products and their associated resources and activities: Resources Supervision Phone and supplies Salaries Computer Total Activities $62,000 Processing accounts 76,000 Issuing statements 304,000 Processing transactions 26,000 Answering customer inquiries 468,000 Time per Unit 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. Activity Driver No. of accounts No. of statements No. of transactions No. of inquiries $ $1 $ 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 per inquiry Answering inquiries Traditional Interest-Bearing Account Account 2,600 60,000 At practical capacity, Golding uses 26,000 check processing hours. Required: 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. $ per hour 160,000 1,500 1,600 10,000 120,000 1,500 2. Assuming there are 2,600 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. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 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. Unit Cost ($ ])×( C

Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account products and their associated resources and activities: Resources Supervision Phone and supplies Salaries Computer Total Activities $62,000 Processing accounts 76,000 Issuing statements 304,000 Processing transactions 26,000 Answering customer inquiries 468,000 Time per Unit 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. Activity Driver No. of accounts No. of statements No. of transactions No. of inquiries $ $1 $ 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 per inquiry Answering inquiries Traditional Interest-Bearing Account Account 2,600 60,000 At practical capacity, Golding uses 26,000 check processing hours. Required: 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. $ per hour 160,000 1,500 1,600 10,000 120,000 1,500 2. Assuming there are 2,600 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. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 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. Unit Cost ($ ])×( C

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 two checking account products and their associated resources and activities: Resources Supervision Phone and supplies Salaries Computer Total Activities $62,000 Processing accounts 76,000 Issuing statements 304,000 Processing transactions 26,000 Answering customer inquiries 468,000 At practical capacity, Golding uses 26,000 check processing hours. Required: $ $ $ Processing accounts Issuing statements Processing transactions Answering inquiries 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. per hour Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts Issuing statements Processing transactions Answering inquiries per account per statement per transaction per inquiry Time per Unit Activity Driver No. of accounts No. of statements No. of transactions No. of inquiries $ 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. $ $ $ Traditional Interest-Bearing Account Account 2,600 60,000 160,000 per account per statement per transaction per inquiry 1,500 2. Assuming there are 2,600 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. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 1,600 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. Unit Cost = ($ ) x ( 10,000 120,000 4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $9,360 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. 1,500
Transcribed Image Text:Simplifying the ABC System: TDABC Golding Bank provided the following data about its two checking account products and their associated resources and activities: Resources Supervision Phone and supplies Salaries Computer Total Activities $62,000 Processing accounts 76,000 Issuing statements 304,000 Processing transactions 26,000 Answering customer inquiries 468,000 At practical capacity, Golding uses 26,000 check processing hours. Required: $ $ $ Processing accounts Issuing statements Processing transactions Answering inquiries 1. Calculate the capacity cost rate for the checking account process. Round your answer to the nearest cent. per hour Calculate the activity rates for the four activities. Round your answers to the nearest cent. Processing accounts Issuing statements Processing transactions Answering inquiries per account per statement per transaction per inquiry Time per Unit Activity Driver No. of accounts No. of statements No. of transactions No. of inquiries $ 0.20 hr. 0.10 hr. 0.05 hr. 0.15 hr. $ $ $ Traditional Interest-Bearing Account Account 2,600 60,000 160,000 per account per statement per transaction per inquiry 1,500 2. Assuming there are 2,600 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. A time equation is used to assign resource costs to checking accounts. Select a time equation for the interest-bearing checking account product. 1,600 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. Unit Cost = ($ ) x ( 10,000 120,000 4. What if process improvements decreased the number of customer inquiries, leading to a 10 percent reduction in check processing hours and a $9,360 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. 1,500
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