Reference no: EM131203365
Personnel Planning; TDABC Recent competitive pressures have caused National Insurance Company to examine policies regarding personnel planning. As a start, the company has decided to experiment with and develop a time-driven ABC model for its claims processing center. A study of this support center indicates the following three primary activities: remote processing of customer claims, 0.5 hour; onsite processing of customer claims, 1.0 hour; and, updating/ maintaining customer records, 0.2 hour. Onsite processing is required for larger claims, while remote processing is done for smaller claims. (For onsite processing, assume—for simplicity—that the claims processors use their own automobiles.)
All claims will require that the customers’ records be updated. The claims processing center currently employs three full-time employees. Total annual cost of the center (salaries, depreciation, utilities, etc.) is estimated at $255,000. The net amount of available personnel time per year for this department is approximately 5,000 hours.
Required
1. Assume now that the customer mix reflected above in requirements 2 and 3 were to change as follows: number of remote cases, 2,700; number of onsite claims, 2,000. How much labor processing time would be needed to service this revised level of service demand? What support cost would be budgeted for each class of customer?
2. In response to the projected shift in customer mix reflected above in requirement 5, why might the company not experience an immediate financial improvement? Put another way, will National’s resource spending necessarily decrease in response to the shift in customer demand?
3. Finally, why do most proponents of ABC (both traditional and time-driven) recommend the use of practical capacity when calculating cost rates for planning purposes?
|
Mills funds represented an investment
: Plaintiff, Gregory Mills, and defendant, Robert Chauvin, formed a partnership and took ownership of a commercial office building located on Crescent Road in the town of Clifton Park, Saratoga County. If the court had accepted Chauvins claim that Mill..
|
|
Budget without raising the debt ceiling
: To balance the United States budget without raising the debt ceiling, the government would need to cut spending by 40% and raise taxes. Speaker of the House, John Boehner recently commented, “When government spending is slashed, jobs are lost and con..
|
|
Generate a projected income statement
: At the most recent strategic planning meeting, the board of directors of your company has voted to issue additional stock to raise capital for major expansions for the company in the next five years. The board is considering $5 million. Generate a pr..
|
|
Examine policies regarding personnel planning
: Personnel Planning; TDABC Recent competitive pressures have caused National Insurance Company to examine policies regarding personnel planning. As a start, the company has decided to experiment with and develop a time-driven ABC model for its claims ..
|
|
What would be the annual ordering cost
: Tom Wassink's irrigation shop uses 3,500 sprinkler heads during the course of a year, and this usage is relatively constant throughout the year. These sprinkler heads are purchased from a supplier 100 miles away for $9.50 each, and the lead time is 3..
|
|
The new product according to the new pricing policy
: Bramlett Company has several divisions and just built a new plant with a capacity of 20,000 units of a new product. A standard costing system has been introduced to aid in evaluating managers' performance and for establishing a selling price for the ..
|
|
Individual accounts receivable in subsidiary ledger
: Below are four specific control objectives. Classify each objective according to the following types of control activities: (1) authorization, (2) accuracy of input, (3) completeness and accuracy of accumulated data, and (4) physical controls. The in..
|