Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 13, Problem 20E
a)
To determine
Develop a table showing percentage of individual activity cost to total
b)
To determine
Calculate the
c)
To determine
Prepare a table showing changes in the activity cost due to the proposed improvements which also shows the changes before improvement of activity cost.
d)
To determine
Determine the average total process cost per claim.
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Process Activity Analysis for a Service Company
Statewide Insurance Company has a process for making payments on insurance claims as follows:
An activity analysis revealed that the cost of these activities was as follows:
Receiving claim
$120,000
Adjusting claim
260,000
Paying claim
120,000
Total
$500,000
This process includes only the cost of processing the claim payments, not the actual amount of the claim payments. The adjusting activity involves verifying and estimating the amount of the claim and is variable to the number of claims adjusted.
The process received, adjusted, and paid 2,000 claims during the period. All claims were treated identically in this process.
To improve the cost of this process, management has determined that claims should be segregated into two categories. Claims under $1,000 and claims greater than $1,000: claims under $1,000 would not be adjusted but would be accepted upon the insured’s evidence of claim. Claims above $1,000 would be…
Process activity analysis:
For a service company Statewide insurance company has a process for making payments on insurance claims as follows.
An activity analysis revealed the cause of these activities was as follows.
Receiving claim $78,000
Adjusting claim 338,000
Paying claim 104,000
Total. $520,000
This process includes only the cost of the process the claims payments, not the actual amount of the claim payments. The adjustment activity involves verify the estimated amount of the claim and is variable to the number of claims adjusted.
The process received, adjusted, and paid 6,500 claims During the period. All claims were treated identically in this process.
To improve the cost of the process, management has determined that claims should be segregated into two categories. Claims under $1,000 at claims greater than $1,000 claims under 1,000 would not be adjusted but would be acceptable to insured evidence of the claim. Claims above $1,000 would be adjusted it is estimated…
Process activity analysis for service Company making payments on insurance claims as follows:
Receiving claim, adjusting claim,paying claim.
Receiving claim- $78,000, adjusting claim- 338,000, paying claim-104,000 ,total $ 520,000
This process includes only the Consular processing the claim payments, not ask you about when the claim payments. The adjustment activity involves verifying and estimated amount of clean and is variable to the number of claims adjust.
The process receive adjusted, and paid 6,500 claims during the period. All claims were treated identically in this process.
To improve the cost of this process, management has determined that claims should be segregated into two categories. Claims under $1,000 claims greater than 1,000; claims under 1,000 would not be adjusted but will be accepted upon insureds xthe evidence of claims. Play Inseparable at the housing would be adjusted. It is estimated that 75% of the claims are under a thousand and would thus be paid…
Chapter 13 Solutions
Managerial Accounting
Ch. 13 - What is the benefit of the lean philosophy?Ch. 13 - Prob. 2DQCh. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Why would a lean manufacturer strive to produce...Ch. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQ
Ch. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 1BECh. 13 - Prob. 2BECh. 13 - Prob. 3BECh. 13 - Prob. 4BECh. 13 - Prob. 5BECh. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - Lean principles Rag Swag Inc. manufactures various...Ch. 13 - Prob. 4ECh. 13 - Reduce setup time Vernon Inc. has analyzed the...Ch. 13 - Compute lead time Jackson Fabricators Inc....Ch. 13 - Calculate lead time Williams Optical Inc. is...Ch. 13 - Prob. 8ECh. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Prob. 11ECh. 13 - Prob. 12ECh. 13 - Lean accounting Modern Lighting Inc. manufactures...Ch. 13 - Prob. 14ECh. 13 - Prob. 15ECh. 13 - Prob. 16ECh. 13 - Prob. 17ECh. 13 - Prob. 18ECh. 13 - Process activity analysis The Brite Beverage...Ch. 13 - Prob. 20ECh. 13 - Prob. 21ECh. 13 - Lean principles Bright Night, Inc., manufactures...Ch. 13 - Prob. 2PACh. 13 - Lean accounting Dashboard Inc. manufactures and...Ch. 13 - Pareto chart and cost of quality report for a...Ch. 13 - Prob. 1PBCh. 13 - Lead time Master Chef Appliance Company...Ch. 13 - Lean accounting Com-Tel Inc. manufactures and...Ch. 13 - Pareto chart and cost of quality report for a...Ch. 13 - Prob. 1MADCh. 13 - Prob. 2MADCh. 13 - Prob. 3MADCh. 13 - Prob. 4MADCh. 13 - Ethics in Action In August, Lannister Company...Ch. 13 - Prob. 3TIFCh. 13 - Prob. 1CMACh. 13 - Prob. 2CMACh. 13 - In measuring the cost of quality, which one of the...Ch. 13 - Prob. 4CMA
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