EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 8220100474972
Author: MOWEN
Publisher: CENGAGE L
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Textbook Question
Chapter 12, Problem 8E
Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity:
Required:
Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
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A cost driver is used to allocate support department expenses. Match each of the following cost drivers with the appropriate department.
Clear All
Number of work orders
Number of employees
Number of payroll checks
Number of purchase
requisitions
President's Office
Payroll Accounting
Maintenance
Human Resources
Purchasing
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
$ 144,000
74,000
90,000
$ 308,000
Activity
Opening accounts
Processing deposits and withdrawals
Processing other customer transactions
Distribution of Resource Consumption Across Activities
Processing
Deposits and
Withdrawals
75%
15%
0%
Opening
Accounts
4%
15%
4%
Activity Cost Pool
Opening…
Draper Bank uses activity-based costing to determine the cost of servicing customers. Thereare three activity pools: teller transaction processing, check processing, and ATM transactionprocessing. The activity rates associated with each activity pool are $3.50 per teller transaction,$0.12 per canceled check, and $0.10 per ATM transaction. Corner Cleaners Inc. (a customer ofDraper Bank) had 12 teller transactions, 100 canceled checks, and 20 ATM transactions duringthe month. Determine the total monthly activity-based cost for Corner Cleaners Inc. during themonth.
Chapter 12 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 12 - What are the two dimensions of the activity-based...Ch. 12 - What is driver analysis? What role does it play in...Ch. 12 - What is activity analysis? Why is this approach...Ch. 12 - What are value-added activities? Value-added...Ch. 12 - What are non-value-added activities?...Ch. 12 - Identify and define four different ways to manage...Ch. 12 - What is a kaizen standard? Describe the kaizen and...Ch. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 13DQCh. 12 - Describe a financial-based responsibility...Ch. 12 - Describe an activity-based responsibility...Ch. 12 - Prob. 1CECh. 12 - Prob. 2CECh. 12 - Gordon Company produces custom-made machine parts....Ch. 12 - Prob. 4CECh. 12 - Uchdorf Manufacturing just completed a study of...Ch. 12 - Harvey Company produces two models of blenders:...Ch. 12 - Prob. 7ECh. 12 - Thayne Company has 30 clerks that work in its...Ch. 12 - Suppose that clerical erroreither Thaynes or the...Ch. 12 - Refer to Exercise 12.8. Suppose that clerical...Ch. 12 - Prob. 11ECh. 12 - For Situations 1 through 6, provide the following...Ch. 12 - Maquina Company produces custom-made machine...Ch. 12 - Sanford, Inc., has developed value-added standards...Ch. 12 - Prob. 15ECh. 12 - Jane Erickson, manager of an electronics division,...Ch. 12 - For each of the following situations, two...Ch. 12 - Which of the following are examples of...Ch. 12 - A company is spending 70,000 per year for...Ch. 12 - Which of the following is likely to be used to...Ch. 12 - Activity-based management includes both process...Ch. 12 - The activity of moving materials uses four...Ch. 12 - Joseph Fox, controller of Thorpe Company, has been...Ch. 12 - Baker, Inc., supplies wheels for a large bicycle...Ch. 12 - Novo, Inc., wants to develop an activity flexible...Ch. 12 - Prob. 26PCh. 12 - Tom Young, vice president of Dunn Company (a...Ch. 12 - Bienestar, Inc., has two plants that manufacture a...Ch. 12 - Kelly Gray, production manager, was upset with the...Ch. 12 - Prob. 30P
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