Solution:
Distribute overhead cost among resource consumption activities as follows:
Particulars | Opening accounts | Processing deposits and withdrawals | Processing other customer transactions | Other activities | Totals |
Teller wages | $5,600 ($140,000*4%) | $100,800 ($140,000*72%) | $23,800 ($140,000*17%) | $9,800 ($140,000*7%) | $140,000 |
Assistant branch manager salary | $8,710 ($67,000*13%) | $13,400 ($67,000*20%) | $15,410 ($67,000*23%) | $29,480 ($67,000*44%) | $67,000 |
Branch manager salary | $3,480 ($87,000*4%) | $0 ($87,000*0%) | $17,400 ($87,000*2%) | $66,120 ($87,000*76%) | $87,000 |
Total | $17,790 | $114,200 | $56,610 | $105,400 | $294,000 |
Compute the activity rate of opening accounts as shown below:
Activity rate = activity cost/ cost drivers
=$17,790 /190
=$93.63
Compute the activity rate of processing deposits and withdrawals as shown below:
Activity rate = activity cost/ cost drivers
=$114,200/47,000
=$2.42
Compute the activity rate of processing other customer transaction is as shown below:
Activity rate = activity cost/ cost drivers
=$56,610/900
=$62.9
Activity cost pool |
Activity rate |
Opening account |
$93.63 Per account opened |
Processing deposit and withdrawals |
$2.42 Per deposit or withdrawal |
Processing other customer transactions |
$62.9 per other customer transaction |
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Saved Help Save & Exit Su The operations vice president of Security Home Bank has been...
The operations vice president of Security Home Bank 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...
The operations vice president of Security Home Bank 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...
The operations vice president of Security Home Bank 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...
The operations vice president of Security Home Bank 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...
The operations vice president of Security Home Bank 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...
The operations vice president of Security Home Bank 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...
The operations vice president of Security Home Bank 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...
The operations vice ident of Security Home Bank 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...
The operations vice president of Security Home Bank 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...
The operations vice president of Security Home Bank 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...