Refer to the interview in Exercise 4.17 (especially to Question 4 and 7). The general ledger reveals the following annual costs:                          Supervisor’s salary                                      $ 64, 600                          Clerical salaries                                              210,000                          Computers, desks, and printers                        32,000                          Computer supplies                                             7,200                          Telephone expenses                                           4,000                          ATM                                                         $ 1,250,000All non labor resources, other than the ATM, are spread evenly among the eight credit department employees (in terms of assignment and usage). Credit department employees have no contact with ATMs. Printers and desks are used in the same ratio as computers by the various activities. Required:Determine the cost of all primary and secondary activities.Assign the cost of secondary activities to the primary activities.

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Asked Feb 9, 2020
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Refer to the interview in Exercise 4.17 (especially to Question 4 and 7). The general ledger reveals the following annual costs:

                          Supervisor’s salary                                      $ 64, 600

                          Clerical salaries                                              210,000

                          Computers, desks, and printers                        32,000

                          Computer supplies                                             7,200

                          Telephone expenses                                           4,000

                          ATM                                                         $ 1,250,000

All non labor resources, other than the ATM, are spread evenly among the eight credit department employees (in terms of assignment and usage). Credit department employees have no contact with ATMs. Printers and desks are used in the same ratio as computers by the various activities.

 

Required:

  1. Determine the cost of all primary and secondary activities.
  2. Assign the cost of secondary activities to the primary activities.
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Expert Answer

Step 1

1.

Calculate the cost of all primary and secondary activities of G Bank.

Accounting homework question answer, step 1, image 1

Step 2

Working notes:

Compute and assign the overhead costs to appropriate activities with respect to labor cost.

Accounting homework question answer, step 2, image 1

Compute and assign the overhead costs to appropriate activities with respect to computers, desks, and printers.

Accounting homework question answer, step 2, image 2

Accounting homework question answer, step 2, image 3

Accounting homework question answer, step 2, image 4

Step 3

Working notes continued...

Compute and assign the overhead costs to appropriate activities with respect to telephone cost.

Accounting homework question answer, step 3, image 1

Accounting homework question answer, step 3, image 2

Accounting homework question answer, step 3, image 3

Compute and assign the overhead costs to appropriate activities with respect to AMT cost.

Accounting homework question answer, step 3, image 4

...

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