Activity-based costs Friendly Bank is developing an activity-based cost system for its teller department. A task force has identified five different activities: (1) process deposits, (2) process withdrawals, (3) answer customer inquiries, (4) sell negotiable instruments, and (5) balance drawers. By tracing the costs of operating the teller department to these five activities, the task force has com¬ piled the following information regarding support costs and activities for one of its suburban branches.

REQUIRED

(a) Compute the activity cost driver rates for each of the support activities.

(b) The task force has developed the following bill of activities for a typical checking account marketed to retired persons.

Estimate the total monthly support costs for this checking account product.

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ESTIMATED MONTHLY SUPPORT ACTIVITY COST ACTIVITY COST DRIVER LEVEL Process deposits $29,630 Number of deposits processed 33,250 Process withdrawals 26,080 Number of withdrawals processed 22,750 Answer inquiries 24,860 Number of customer inquiries 45,000 Sell negotiable 4,860 Number of negotiable 1,100 instruments instruments sold Balance drawers 4,290 Number of drawers balanced 1,300 $89,720