Co-Operative Bank Case

THE CO-OPERATIVE BANK: CASE ANALYSIS Q1: What new issues, if any, arise when applying outline to dish out business? Activity Based be (first principle) is a be method that defines a firms activities and then assigns cost or overheads found on those activities. For case in the case, the activities of Co-operative money box as illustrated in gift 5 argon providing automated teller services, issuing sound out books, handling customer inquiries etc. and so be incurred by each cost centre or resource crime syndicate are allocated on the basis if those activities. By applying activity based costing the bank was able to view the cost of an extra service such as fiscal advice services. To understand the issues ring the application of ABC to service organizations, it is important to note the fight between applying ABC to service organizations and manufacturing companies. Firstly, with a manufacturing company, the product costs throne be traced easily because a large pa rticle of costs is attributable to direct confinement and materials used in the production process. However in a service organization, it is operose to identify direct costs cerebrate to a unique(predicate) 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 confused benefits to service organizations. For i nstance, ABC gives upper management the ene! rgy to dismember the business based on individual products so that they can evaluate the profitability of each individual service. Furthermore, by identifying activities performed it gives discernment into the revenues earned per activity (Ashford, 2011). Basically the information provided accurately informs their finis making and helps them evaluate areas for investment and areas for...If you want to make mean a full essay, order it on our website: BestEssayCheap.com

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