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

Assigning Cost of Resources to Activities, Unbundling the General Ledger

Resources		Activities	Clerical Hours
Supervision	$72,000	Processing accounts		10,360
Phone and supplies	91,000	Issuing statements		7,000
Salaries	280,000	Processing transactions		7,840
Computer	30,000	Answering customer inquiries		2,800
Total	$473,000	Total		28,000

Computers are used only by the issuing (20 percent) and processing transaction (80 percent) activities.
Phone and supplies are 70 percent customer inquiries with the other 30 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 28,000 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

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. If required, round your answers to the nearest dollar.

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? If required, round your answers to the nearest dollar.

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

Solutions

Expert Solution

1.) Work distribution matrix for five primary activities.

Activity	Supervisor	Clerks	Supporting calculation
Supervision	100%	0%	(2000/2000)
Processing accounts		37%	(10360/28000)
Issuing Statements		25%	(7000/28000)
Processing transactions		28%	(7840/28000)
Answering customer inquires		10%	(2800/28000)

2.) Cost of each activity

Activities	Computer	Phone and supplies	Supervision & salaries	Total
Supervision		6825	72000	78825
		(91000*30%)/4
Processing accounts		6825	103600	110425
		(91000*30%)/4	280000*37%
Issuing statements	5600	6825	70000	82425
	28000*20%	(91000*30%)/4	280000*25%
Processing transactions	22400	6825	78400	107625
	(28000*80%)	(91000*30%)/4	(280000*28%)
Answering customer inquires		63700	28000	91700
		(91000*70%)	(280000*10%)

3.) Supervision is a secondary activity and its costs are consumed by primary activities.

	Primary Cost	Secondary Cost	Total Cost
Processing accounts	110425	29165.25	139590.25
		(78825*37%)
Issuing statements	82425	19706.25	102131.25
		(78825*25%)
Processing transactions	107625	22071	129696
		(78825*28%)
Answering customer inquires	91700	7882.5	99582.5
		(78825*10%)

ekkarill92 answered 2 years ago

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