Hill County Bank, a small, locally owned institution, is reexamining the way it prices its services. The bank's managers are concerned that some of their customers are less profitable than was believed, and are trying to decide what to include in the cost of various services. Cost estimates related to these services are as follows:

Building utilities, depreciation expense on equipment (including the ATM machine), and other fixed costs total \(\$ 5,000\) per month.

a. What is the cost of a withdrawal using a teller if both fixed and variable costs are included? (Allocate the fixed costs to all transactions.)

b. What is the cost of an ATM withdrawal if both fixed and variable costs are included? (Allocate the fixed costs to all transactions.)

c. Monthly depreciation expense on the ATM machine totals \(\$ 750\). What is the cost of an ATM withdrawal if that is the only fixed cost included in your calculations?

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Transaction Withdrawal, Teller Withdrawal, ATM $0.75 $0.25 $0.80 15,000 Direct labor per transaction Other variable costs per transaction Average # transactions per month 10.000