Commercial Bank Industry

The issues confronting the commercial banking industry in the early-1990s were many and varied. One of issues that is critical to the financial viability of commercial banks is product costing. This issue was investigated in this study.

Whatever the potential was for a savings and loan type debacle in the commercial banking industry, a certainty was that the changing national and international financial services environments demanded that commercial banks become more efficient in their operations if they hoped to survive the remainder of the 1990s.1 While it was essential for commercial banks to pursue operational efficiency improvements in a number of different areas, an area of particular significance in this context was the

1J. C. Svare, "Focus on Fees, Cost Controls Should Keep Bank Profits Steady," Bank Management 68 (September 1

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elated to Product Costing One of the critical factors involved in cost accounting is the differentiation of costs into fixed and variable classifications.29 Fixed costs are those which must be borne by an organization, regardless of activity levels, while variable costs are those which fluctuate according to activity levels. Through the differentiation of costs into fixed and variable classifications, managers are able to construct breakeven charts and other decision-making and control tools. Thus, cost accounting plays a major role in an organization's decision- making processes. In addition to fixed/variable distinctions, production costs are also considered in the contexts of full costs, direct costs, indirect costs, job costs, process costs, and so forth.30 These costing concepts are all a part of the cost accounting process. ---------- 29R. N. Anthony, and J. S. Reece, Accounting, 9th ed. (Homewood, Illinois: Richard D. Irwin, Inc., 1991), 548-553. 30J. C. Cooper, and J. D. Suver, "Product Line Cost Estimation: A Standard Cost Approach," Health Care Financial Management 42 (April 1988): 50. Each of these concepts provides the manager with a different perspective of costs. These different perspectives may provide a means
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Some common words found in the essay are:
Manufacturing Industry, Financial Management, Bank Management, Accounting Research, Administration Congress, Berry Thompson, Kent University, Kimball Gay, Research Framework, American Banker, relationship banking, cost accounting, direct labor, standard costs, commercial banking, product costing, financial services, commercial banks, free market, free market economy, berry thompson, cost accounting procedure, activity-based cost accounting, two-stage activity-based cost, bank product costing,
Approximate Word count = 8851
Approximate Pages = 35 (250 words per page)

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