The operations vice president of Security Home Bank is investigating the efficiency of the bank's operations. She is 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 replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt to show how those costs are related to the various services provided by the bank. The operations vice president has asked for 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 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 were interviewed concerning how their time was distributed ast 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 $ 155,000 69,000 92,000 $ 316,000 Activity Opening accounts Distribution of Resource Consumption Acro Processing Deposits and Withdrawals 71% 13% 0% Opening Accounts 3% 10% 3% Processing deposits and withdrawals Processing other customer transactions Processing Other Customer Transactions 20% 28% 22% The manager of the Westfield branch of Security Home Bank provided the following data concerning the branch's transactions during the past year: Total Activity at the Westfield Branch 255 new accounts opened Required: 1. Compute the activity rates for the activity-based costing system. Note: Round your answers to 2 decimal places. Activities Other Activities 6% 49% 75% 48,000 deposits and withdrawals processed 800 other customer transactions processed Totals 100% 100% 100%

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The operations vice president of Security Home Bank is investigating the efficiency of the bank's operations. She is 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 replicated elsewhere. While the bank
maintains meticulous records of wages and other costs, there has been no attempt to show how those costs are related to the various
services provided by the bank. The operations vice president has asked for 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 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 were 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
Activity
Opening accounts
$ 155,000
69,000
92,000
$ 316,000
Processing deposits and withdrawals
Processing other customer transactions.
Activity Cost Pool
Opening accounts
Distribution of Resource Consumption Across Activities
Processing
Deposits and
Withdrawals
71%
13%
0%
Opening
Accounts
3%
10%
3%
Processing deposits and withdrawals
Processing other customer transactions
The manager of the Westfield branch of Security Home Bank provided the following data concerning the branch's transactions during
the past year:
Required:
1. Compute the activity rates for the activity-based costing system.
Note: Round your answers to 2 decimal places.
Processing Other
Customer
Transactions
20%
28%
22%
Total Activity at the Westfield Branch
255 new accounts opened
Activity Rate
48,000 deposits and withdrawals processed
800 other customer transactions processed
Other
Activities
6%
49%
75%
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 is investigating the efficiency of the bank's operations. She is 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 replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt to show how those costs are related to the various services provided by the bank. The operations vice president has asked for 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 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 were 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 Activity Opening accounts $ 155,000 69,000 92,000 $ 316,000 Processing deposits and withdrawals Processing other customer transactions. Activity Cost Pool Opening accounts Distribution of Resource Consumption Across Activities Processing Deposits and Withdrawals 71% 13% 0% Opening Accounts 3% 10% 3% Processing deposits and withdrawals Processing other customer transactions The manager of the Westfield branch of Security Home Bank provided the following data concerning the branch's transactions during the past year: Required: 1. Compute the activity rates for the activity-based costing system. Note: Round your answers to 2 decimal places. Processing Other Customer Transactions 20% 28% 22% Total Activity at the Westfield Branch 255 new accounts opened Activity Rate 48,000 deposits and withdrawals processed 800 other customer transactions processed Other Activities 6% 49% 75% per account opened per deposit or withdrawal per other customer transaction Totals 100% 100% 100%
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