Co-Operative Bank Case

THE CO-OPERATIVE BANK: CASE ANALYSIS Q1: What new issues, if any, arise when applying compend to dish out business? Activity Based be (first principle) is a be method that defines a firms activities and then assigns cost or overheads ground on those activities. For compositors case in the case, the activities of Co-operative money box as illustrated in video display 5 be providing automated teller services, issuing stay books, handling customer inquiries etc. and so cost incurred by each cost centre or resource pot are allocated on the basis if those activities. By applying activity based costing the bank was able to view the cost of an superfluous service such as fiscal advice services. To understand the issues touch the application of ABC to service organizations, it is important to note the diversion between applying ABC to service organizations and manufacturing companies. Firstly, with a manufacturing company, the product costs idler be traced easily becau se a large pct of costs is attributable to direct confinement and materials used in the production process. However in a service organization, it is tall(prenominal) to identify direct costs cerebrate to a proper(postnominal) service. This is because services are largely intangible asset and are directly delivered to customers through employees.

Therefore it follows that one mien in which the cost of providing a service can be captured, is by giving close estimates of the amount of time spend on delivering a particular service (Hartman, 1998). Despite these challenges ABC offers miscellaneous benefits to ser vice organizations. For instance, ABC gives ! upper management the energy to break up the business based on individual products so that they can evaluate the profitability of each individual service. Furthermore, by identifying activities performed it gives brainwave into the revenues earned per activity (Ashford, 2011). Basically the information provided accurately informs their finality making and helps them evaluate areas for investment and areas for...If you want to make deal a full essay, order it on our website: BestEssayCheap.com

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