Consider the Following Costs That Relate to a Bank and a Manufacturer

question 9

Essay

Consider the following costs that relate to a bank and a manufacturer of software:
Bank
1. Review costs of commercial loan applications
2. Operating costs of human resources department
3. Immediate processing costs of a specific customer's cash deposit
4. Bank membership costs of joining local Chamber of Commerce
Software manufacturer
5. Label and packaging charges from a commercial printer for a new software release
6. Air conditioning/heating costs of the firm's production plant
7. Transport costs of moving the finished products from production run no. 1 to the company's warehouse
8. Design and development costs of new spreadsheet software
Required:
A. Classify the eight costs listed as arising from either a unit-level, batch-level, product-sustaining, or facility-level activity.
B. Would number of loan applications or number of customers be a more appropriate cost-driver base for #1 above? Briefly explain.

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Definitions:

Communication Process

The sequence of steps by which a message is transmitted from sender to receiver, including encoding, medium selection, decoding, and feedback.

Ad Campaign

A coordinated series of advertisements, across one or several mediums, designed to achieve a specific business goal or marketing objective.

Encode

The process of converting information into a particular form, often for communication or storage purposes.

Communication Process

The sequence of steps through which information is transmitted and received, involving a sender, message, medium, receiver, and feedback.