Q2. Data Processors Inc. performs credit card services for banks. The company uses an ABC system. Following is informati

[answerhappygod]

Q2. Data Processors Inc. performs credit card services for
banks. The company uses an ABC system. Following is information for
the past year: Activity Estimated Cost Actual Cost Cost Driver
Estimated Activity Level Actual Activity Level Processing
transactions $2,000,000 $2,200,000 Number of transactions 5,000,000
5,800,000 Issuing monthly statements 1,000,000 1,300,000 Number of
statements 250,000 270,000 Issuing new credit cards 500,000 400,000
Number of new credit cards 100,000 110,000 Resolving billing
disputes 90,000 100,000 Number of disputes 3,000 3,500 Total
$3,590,000 $4,000,000 REQUIRED 1. Using budgeted values for costs
and activity, calculate an ABC allocation rate for each activity.
2. Prepare an operating cost statement for Data Processors that
compares the static budget, the flexible budget, and actual costs.
3. Calculate the spending variance for the cost of processing
transactions. 4. Suppose the costs for processing transactions
include some fixed and some variable costs, as shown here:
Estimated Cost Actual Cost Fixed costs $1,000,000 $1,300,000
Variable costs 1,000,000 900,000 Total $2,000,000 $2,200,000
Based on the new information, calculate spending variances for the
cost of processing transactions. 5. Discuss possible reasons for
the variances calculated in Part 4. please help with question 2 and
3