- Problem 11 23a Algo Context Sensitive Nature Of Cost Behavior Classifications Lo 11 1 11 2 Gibson Bank S Start Up Div 1 (53.79 KiB) Viewed 34 times
- Problem 11 23a Algo Context Sensitive Nature Of Cost Behavior Classifications Lo 11 1 11 2 Gibson Bank S Start Up Div 2 (46.52 KiB) Viewed 34 times
- Problem 11 23a Algo Context Sensitive Nature Of Cost Behavior Classifications Lo 11 1 11 2 Gibson Bank S Start Up Div 3 (52.46 KiB) Viewed 34 times
Problem 11-23A (Algo) Context-sensitive nature of cost behavior classifications LO 11-1, 11-2 Gibson Bank's start-up division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $95,000 per year. The three tellers combined can process up to 90,000 customer transactions per year. If a branch does not attain a volume of at least 60,000 transactions during its first year of operations, it is closed. If the demand for services exceeds 90,000 transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations. Required a. What is the relevant range of activity for new branch banks? b. Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 60,000, 70,000, 80,000, or 90,000 transactions. In this case (the activity base is the number of transactions for a specific branch), is the teller cost a fixed or a variable cost? c. Determine the amount of teller cost in total and the average teller cost per branch for Gibson Bank, assuming that the start-up division operates 30, 35, 40 or 45 branches. In this case (the activity base is the number of branches), is the teller cost a fixed or a variable cost? Complete this question by entering your answers in the tabs below. Required C What is the relevant range of activity for new branch banks? (Enter the lower end of the relevant range first.) The relevant range is Required A Required B 10 transactions. Required A Required B >
Problem 11-23A (Algo) Context-sensitive nature of cost behavior classifications LO 11-1, 11-2 Gibson Bank's start-up division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $95,000 per year. The three tellers combined can process up to 90,000 customer transactions per year. If a branch does not attain a volume of at least 60,000 transactions during its first year of operations, it is closed. If the demand for services exceeds 90,000 transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations. Required a. What is the relevant range of activity for new branch banks? b. Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 60,000, 70,000, 80,000, or 90,000 transactions. In this case (the activity base is the number of transactions for a specific branch), is the teller cost a fixed or a variable cost? c. Determine the amount of teller cost in total and the average teller cost per branch for Gibson Bank, assuming that the start-up division operates 30, 35, 40 or 45 branches. In this case (the activity base is the number of branches), is the teller cost a fixed or a variable cost? Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 60,000, 70,000, 80,000, or 90,000 transactions. In this case (the activity base is the number of transactions for a specific branch), is the teller cost a fixed or a variable cost? (Round "Average per unit teller cost" to 2 decimal places.) 90,000 No. of Transactions Total teller cost Average per unit teller cost The teller cost is a 60,000 70,000 80,000