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:

Mediated Norm

Social norms and behaviors that are influenced and shaped by media consumption, reflecting the impact of media on cultural standards and expectations.

Narrow Range

Refers to a limited scope or selection within a particular category or field.

Mass Advertising

A type of marketing strategy that targets a large audience through various mediums in order to promote products or services.

Upper-Middle-Class

A socioeconomic group characterized by higher income, education, and professional occupations than the average, usually situated between the middle and upper classes.