Golding Bank provided the following data about its resources and activities for its checking account process: Resources Activities Clerical Hours Supervision $70,000 Processing accounts 10,000 Phone and supplies 90,000 Issuing statements 5,000 Salaries 275,000 Processing transactions 7,000 Computer 25,000 Answering customer inquiries 3,000 Total $460,000 Total 25,000 Computers are used only by the issuing (30 percent) and processing transaction (70 percent) activities. Phone and supplies are 60 percent customer inquiries with the other 40 percent divided equally among the remaining activities, including supervising the checking operation. The supervisor spends 100 percent of his time on supervision. In addition to the 25,000 clerical hours, there are 2,000 hours of supervision used (the hours used by the supervising clerks activity, which is not listed above). Required: 1. Prepare a work distribution matrix for the five primary activities. If an answer is zero, enter "0". Golding Bank Percentage of Time on Each Activity Activity Supervisor Clerks Supervising clerks % % Processing accounts Issuing statements Processing transactions Answering customer inquiries Feedback 1. A work distribution matrix simply identifies the Amount of labor consumed by each activity. The supervising ratio is given. The remaining four ratios are calculated using the clerical hrs. ÷ total processing hours 2. Calculate the cost of each activity. Activity Total Supervising clerks $ Processing accounts $ Issuing statements $ Processing transactions $ Answering customer inquiries $ 3. If the cost of the supervising activity is assigned to the other four activities, what is the final cost of these four primary activities? Processing accounts $ Issuing statements $ Processing transactions $ Answering customer inquiries $

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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Assigning Cost of Resources to Activities, Unbundling the General Ledger

Golding Bank provided the following data about its resources and activities for its checking account process:

Resources		Activities	Clerical Hours
Supervision	$70,000	Processing accounts	10,000
Phone and supplies	90,000	Issuing statements	5,000
Salaries	275,000	Processing transactions	7,000
Computer	25,000	Answering customer inquiries	3,000
Total	$460,000	Total	25,000

Computers are used only by the issuing (30 percent) and processing transaction (70 percent) activities.
Phone and supplies are 60 percent customer inquiries with the other 40 percent divided equally among the remaining activities, including supervising the checking operation.
The supervisor spends 100 percent of his time on supervision. In addition to the 25,000 clerical hours, there are 2,000 hours of supervision used (the hours used by the supervising clerks activity, which is not listed above).

Required:

1. Prepare a work distribution matrix for the five primary activities. If an answer is zero, enter "0".


Golding Bank
Percentage of Time on Each Activity
Activity	Supervisor	Clerks
Supervising clerks	%	%
Processing accounts
Issuing statements
Processing transactions
Answering customer inquiries

Feedback

1. A work distribution matrix simply identifies the Amount of labor consumed by each activity. The supervising ratio is given. The remaining four ratios are calculated using the clerical hrs. ÷ total processing hours

2. Calculate the cost of each activity.

Activity	Total
Supervising clerks	$
Processing accounts	$
Issuing statements	$
Processing transactions	$
Answering customer inquiries	$

3. If the cost of the supervising activity is assigned to the other four activities, what is the final cost of these four primary activities?

Processing accounts	$
Issuing statements	$
Processing transactions	$
Answering customer inquiries	$

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