I Need Assistance with this question? The operations vice president of First Ban
ID: 2701263 • Letter: I
Question
I Need Assistance with this question?
The operations vice president of First Bank of Eagle, Kristin Wu, has been interested in investigating the efficiency of the bank%u2019s operations. She has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank%u2019s various branches. If the branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far to show how those costs are related to the various services provided by the bank. Ms. Wu has asked your help in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account, the cost of processing deposits and withdrawals, and the cost of processing other customer transactions.
Virtually all of the other costs of the branch%u2014rent, depreciation, utilities, and so on%u2014are 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 Avon branch have been 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:
Distribution of Resource Consumption Across Activities
Prepare the first-stage allocation for Ms. Wu. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Distribution of Resource Consumption Across Activities
The operations vice president of First Bank of Eagle, Kristin Wu, has been interested in investigating the efficiency of the bank%u2019s operations. She has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank%u2019s various branches. If the branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank maintains meticulous records of wages and other costs, there has been no attempt thus far to show how those costs are related to the various services provided by the bank. Ms. Wu has asked your help in conducting an activity-based costing study of bank operations. In particular, she would like to know the cost of opening an account, the cost of processing deposits and withdrawals, and the cost of processing other customer transactions.
Explanation / Answer
OPENING processing processing other total
accounts deposits other customer activity
teller wages 0 112500 22500 15000 150000
Assistant salary 7000 10500 17500 35000 70000
Branch salary 0 0 17000 68000 85000
total cost 7000 123000 57000 118000 305000
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