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

question 55

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. 1. Unit-level
2. Facility-level
3. Unit-level
4. Facility-level
5. Product-sustaining
6. Facility-level
7. Batch-level
8. Product-sustaining
A. Classify the eight costs listed as arising from either a unit-level, batch-level, product-sustaining, or facility-level activity.
B. The number of loan applications would be more appropriate because it has a higher correlation with the amount of review costs incurred. Applications create review costs; customers, on the other hand, may not.
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:

Proxemics

The study of human use of space and the effects that population density has on behavior, communication, and social interaction.

Self-Esteem

An individual's overall subjective emotional evaluation of their own worth or value.

Nonverbal Communication

The process of conveying a message without the use of words, through gestures, facial expressions, and body language.

Selective Listening

The process where an individual consciously or subconsciously chooses to pay attention only to certain messages or parts of a conversation while ignoring others.