DBS Bank is examining the profitability of its premier account to its private customers segment. The bank earns an interest rate spread of 2% (the difference between the rate at which it lends Money and the rate it pays depositors) by lending money for home loan purposes at 6% while customers receive 4% on their average balance. Thus the bank gain $40 on the interest spread if a depositor has an average premier account balance of $2,000 ($2,000 X 0.02 = $40).

The premier account allows depositors unlimited use of services such as deposits, withdraws, checking accounts, and foreign currency drafts. Depositors with balances of $1,000 or more receive unlimited free use of services. Depositors with average balances of less than $1,000 pay a fee of $15/month.

The bank recently has implemented activity based costing to compute the cost of its services. Last year, the use of these services by three customers is as follows:

	Activity cost per driver	Account Usage
		Joanne	Justina	Robert
Deposits/Withdraws in the branch Deposits/Withdraws with ATM Bank Checks Written Foreign Currency Drafts Inquiries About Account Balance Average Premier Account Balance	$1.80 $0.60 $6.00 $9.00 $0.75	40 10 12 6 12 $1,200	30 20 4 1 24 $800	5 30 2 14 8 $25,000

Assume Joanne and Robert always maintain a balance above 1,000 , whereas Justina has a balance below 1,000 during 10 months of the year. Compute the profitability of each account for last year. Comment the results and advise DBS Bank regarding its account.