The operations vice president of Security Home Bank has been interested in investigating the efficiency of the bank's operations. She has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far to show how those costs are related to the various services provided by the bank. The operations vice president has asked your help in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account. the cost of processing deposits and withdrawals, and the cost of processing other customer transactions. The Westfield branch of Security Home Bank has submitted the following cost data for last year: Teller wages Assistant branch manager salary Branch manager salary Total Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are organization-sustaining costs that cannot be meaningfully assigned to individual customer transactions such as depositing checks. In addition to the cost data above, the employees of the Westfield branch have been interviewed concerning how their time was distributed last year across the activities included in the activity-based costing study. The results of those interviews appear below. Teller wages Assistant branch manager salary Branch manager salary $ 154,000 72,000 87,000 $ 313,000 Activity Opening accounts Processing deposits and withdrawals Processing other customer transactions Opening Accounts Activity Cost Pool Opening accounts Processing deposits and withdrawals Processing other customer transactions Distribution of Resource Consumption Across Activities Processing Deposits and withdrawals 68% 14% ev 4% 9% 4% Processing Other Customer Transactions The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year: 19% 20% 17% Activity Rate Other Activities 94 57% 79% Total Activity at the Westfield Branch 205 new accounts opened 45,500 deposits and withdrawals processed i 1,200 other customer transactions processed Required: Compute the activity rates for the activity-based costing system. (Round your answers to 2 decimal places.) per account opened per deposit or withdrawal per other customer transaction Totals 100% 100% 100%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Subject: acounting 

The operations vice president of Security Home Bank has been interested in investigating the efficiency of the bank's operations. She
has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at
the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and
then replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far
to show how those costs are related to the various services provided by the bank. The operations vice president has asked your help
in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account.
the cost of processing deposits and withdrawals, and the cost of processing other customer transactions.
The Westfield branch of Security Home Bank has submitted the following cost data for last year:
Teller wages
Assistant branch manager salary
Branch manager salary
Total
Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are organization-sustaining costs that cannot be
meaningfully assigned to individual customer transactions such as depositing checks.
In addition to the cost data above, the employees of the Westfield branch have been interviewed concerning how their time was
distributed last year across the activities included in the activity-based costing study. The results of those interviews appear below.
Teller wages
Assistant branch manager salary
Branch manager salary)
$ 154,000
72,000
87,000
$ 313,000
Activity
Opening accounts
Processing deposits and withdrawals.
Processing other customer transactions
Distribution of Resource Consumption Across Activities
Processing
Deposits and
Withdrawals
68%
14%
04
Opening
Accounts
4%
9%
4%
Activity Cost Pool
Opening accounts
Processing deposits and withdrawals
Processing other customer transactions
Processing Other
Customer
Transactions
19%
20%
17%
The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the
branch during the past year:
Other
Activities
9%
57%
79%
Total Activity at the Westfield Branch
205 new accounts opened
45,500 deposits and withdrawals processed
1,200 other customer transactions processed
Required:
1. Compute the activity rates for the activity-based costing system. (Round your answers to 2 decimal places.)
Activity Rate
per account opened
per deposit or withdrawal
per other customer transaction
Totals
100%
100%
100%
Transcribed Image Text:The operations vice president of Security Home Bank has been interested in investigating the efficiency of the bank's operations. She has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far to show how those costs are related to the various services provided by the bank. The operations vice president has asked your help in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account. the cost of processing deposits and withdrawals, and the cost of processing other customer transactions. The Westfield branch of Security Home Bank has submitted the following cost data for last year: Teller wages Assistant branch manager salary Branch manager salary Total Virtually all other costs of the branch-rent, depreciation, utilities, and so on-are organization-sustaining costs that cannot be meaningfully assigned to individual customer transactions such as depositing checks. In addition to the cost data above, the employees of the Westfield branch have been interviewed concerning how their time was distributed last year across the activities included in the activity-based costing study. The results of those interviews appear below. Teller wages Assistant branch manager salary Branch manager salary) $ 154,000 72,000 87,000 $ 313,000 Activity Opening accounts Processing deposits and withdrawals. Processing other customer transactions Distribution of Resource Consumption Across Activities Processing Deposits and Withdrawals 68% 14% 04 Opening Accounts 4% 9% 4% Activity Cost Pool Opening accounts Processing deposits and withdrawals Processing other customer transactions Processing Other Customer Transactions 19% 20% 17% The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year: Other Activities 9% 57% 79% Total Activity at the Westfield Branch 205 new accounts opened 45,500 deposits and withdrawals processed 1,200 other customer transactions processed Required: 1. Compute the activity rates for the activity-based costing system. (Round your answers to 2 decimal places.) Activity Rate per account opened per deposit or withdrawal per other customer transaction Totals 100% 100% 100%
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