3 Simplifying the ABC System: TDABCGolding Bank provided the following data about its resources and activities for its checking account process:Time per Unitof ActivityResourcesSupervisionPhone and suppliesSalariesComputerTotalRequired:$70,000 Processing accounts90,000 Issuing statements275,000 Processing transactions25,000 Answering customer inquiries$460,000At practical capacity, Golding uses 25,000 check processing hours.$XActivities3.681.840.92Calculate the activity rates for the four activities. Round your answers to the nearest cent.Processing accountsIssuing statements2.76Driverper accountNo. of accountsper statementNo. of statementsNo. of transactionsNo. of inquiries1. Calculate the capacity cost rate for the checking account process. Round your answers to the nearest cent.per hour18.40.20 hr.0.10 hr.0.05 hr.0.15 hr.TraditionalAccount2,00060,000160,0001,500Interest-BearingAccount1,00010,000120,000Processing transactionsper transactionAnswering inquiriesper inquiry2. 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 nearestcent.Unit cost $1,500

ABC System -ABC system refers to the cost allocation to cost units based on benefits obtained from…

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

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 7CE: Golding Bank provided the following data about its resources and activities for its checking account...

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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 Activities Time per Unit Activity Driver Supervision $68,000 Processing accounts 0.20 hr. No. of accounts Phone and supplies 84,000 Issuing statements 0.10 hr. No. of statements Salaries 188,000 Processing transactions 0.05 hr. No. of transactions Computer 20,000 Answering customer inquiries 0.15 hr. No. of inquiries Total 360,000 Total check processinghours 20,000 (practical capacity) Required:
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