Fordson Bank operates a branch in a relatively small rural community. Fordson has a strong customer service focus and knows that branch visits can be important in fostering a reputation for good customer service. However, as internet banking increases in popularity, the financial staff at Fordson question whether the costs of the branch are worth it. As part of looking at the question, a financial analyst has collected monthly data on the number of customer visits to the branch and the operating cost of the branch over the last fiscal year. The data follow: Month Customer Visits 1 3 11 12 962 1,378 1,170 1,014 1,586 1,580 1,40€ 1,222 1,144 1,248 1,430 1,040 1,092 1,066 Branch Cost $ 71,534 90,046 80,790 73,848 15,898 Branch cost= 99,302 327304 83,104 83,40% 79,633 13,633 84,261 69,20 92,360 75,005 77,319 76,162 Required: a. Estimate the monthly fixed costs and the unit variable cost per customer visit using the high-low estimation method. Note: Round variable cost per unit to 2 decimal places. per visit Customer visits

Fordson Bank operates a branch in a relatively small rural community. Fordson has a strong customer service focus and knows that branch visits can be important in fostering a reputation for good customer service. However, as internet banking increases in popularity, the financial staff at Fordson question whether the costs of the branch are worth it. As part of looking at the question, a financial analyst has collected monthly data on the number of customer visits to the branch and the operating cost of the branch over the last fiscal year. The data follow: Month Customer Visits 1 3 11 12 962 1,378 1,170 1,014 1,586 1,580 1,40€ 1,222 1,144 1,248 1,430 1,040 1,092 1,066 Branch Cost $ 71,534 90,046 80,790 73,848 15,898 Branch cost= 99,302 327304 83,104 83,40% 79,633 13,633 84,261 69,20 92,360 75,005 77,319 76,162 Required: a. Estimate the monthly fixed costs and the unit variable cost per customer visit using the high-low estimation method. Note: Round variable cost per unit to 2 decimal places. per visit Customer visits

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 65P

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