The University Credit Union (UCU) has engaged your services to determine the cost of its...
70.2K
Verified Solution
Link Copied!
Question
Accounting
The University Credit Union (UCU) has engaged your services to determine the cost of its various activities. The following data are available for a representative branch.
Process Deposits
Process Checks
Balance Inquiries
Branch Visits
Total Costs
Tellers
30%
40%
10%
20%
$150,000
Assistant Manager
10%
10%
5%
75%
$75,000
Managers
2%
3%
5%
90%
$90,000
The employees are all full-time. The average branch processes 60,000 deposits and 125,000 check transactions and 232,500 balance inquiries and 3,345 branch visits each year.
UCU has also collected the following information about 4 specific customers for the year:
Process Deposits
Process Checks
Balance Inquiries
Branch Visits
A
8,000
15,000
20,000
10
B
2,000
4,000
24,000
18
C
15,000
20,000
35,000
20
D
25,000
35,000
50,000
35
Calculate cost per activity to the 0.000th value:
Compute Total Profit for customers A, B, C, and D after allocating the cost of their activities. Please use the budgeted rates for cost allocations
Should UCU drop any of the customers A, B, C, D? Why or why not? List 2 factors
Should they consider before dropping a customer?
What happens to total firm profits if the number of branch visits received were to drop from 3,345 to 3,000?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
