Question

Exercise 7-10 First-Stage Allocations (L02) The operations vice-president of the Regal Bank of Canada, Kristin Wu, has been interested in investigating the efficiency of the bank's 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's 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. Wu has asked for your help in conducting an ABC 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. The Windsor branch of the Regal Bank of Canada submitted the following cost data for last year. Teller wages Assistant branch manager salary Branch manager salary $172,000 81, eee 101,500 $354,500 Total Virtually all of the 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 cheques. In addition to the cost data above, the emplovees of the Windsor branch have been interviewed concerning how their time was 2 of 2 Score answer > ENG 2018 < Prev

Answer 1

First stage allocation

	Opening accounts	Processing deposits and withdrawals	Processing other customer transaction	Other activities	Totals
Teller wages	0	129000	25800	17200	172000
Assistant branch manager salary	8100	16200	20250	36450	81000
Branch manager salary	0	0	10150	91350	101500
Total	8100	145200	56200	145000	354500