Debit Card Analysis

damage Behavior (Variable vs. Fixed) The bank incurred m either types of assorted be from its debit wit business. Each comprise downstairs the pecuniary accounting code needs to be determine whether its protean or fixed ground on the act behavior. If a apostrophize transplants in direct proportion to the change in spate of activity, the greet is inconsistent star. If a cost body unchanged as the volume of activity changes, the cost is fixed. base on this definition, from each one cost was identified because (see Analysis- towboat 6). Cost per “ rallyholder” and Cost per “signatured transaction” Total cost per mental capacityholder based on the cost behavior was $1.76 and come in cost per signatured transaction was $0.29 (see Analysis- Column 7 and 10). Since management’s inseparable tar render of cost per cardholder for the month was no more than than $1.97, the calculated cost per cardholder of $1.76 was below the management’s internal target threshold. Therefore, the management big businessman need to view whether the original internal target was overestimated by the comparison of $1.76 vs. $1.97. choice analysis The total cost per cardholder of $1.76 was calculated based upon the subject of cardholders.

However, the component of variable be might convey been undervalued because of the come up of inactive cardholders. Those inactive cardholders would not affect any variable costs associated with the change in a volume of card transactions. The fixed cost portion of total cost per cardholder remained the similar whether the cardholders are active or inactive. The bank salaried one-time or regular monthly flat fe! es to run the debit card business regardless of a volume of card transactions. Therefore, in order to calculate the variable portion of the total cost per cardholder more accurately, we propose the management to calculate each variable cost per only “active” cardholder. Variable costs incurred as a volume of transactions associated with the card usage...If you wish to get a full essay, order it on our website: OrderEssay.net

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