Compute the activity rates for activity-based costing system

Assignment Help Accounting Basics

Reference no: EM132482275

Point 1: 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 no attempt thus far to show how those costs are related to the various services provided by the bank. The operations vice president 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.

The Westfield branch of Security Home Bank has submitted the following cost data for last year:

Teller wages: 142,000

Assistant branch manager salary: $72,000

Branch manager

The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year:

Activity

Total Activity at the Westfield Branch

Opening accounts 250

new accounts opened

Processing deposits and withdrawals 54,000

deposits and withdrawals processed

Processing other customer transactions 1,150

other customer transactions processed

Required:

Question 1. Compute the activity rates for the activity-based costing system

Reference no: EM132482275

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