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EasyCredit Financial is a banking services company that offers many different types of chequing accounts. It has recently adopted an activity-based costing (ABC) system to

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EasyCredit Financial is a banking services company that offers many different types of chequing accounts. It has recently adopted an activity-based costing (ABC) system to assign costs to various types of chequing accounts. The following data relate to one type of chequing account, the money marker cheguing account, and the ABC cost pools Total number of cheving accounts: Number of money market shaving accounts: 221,750 70,000 Chequeing Account Cost Pools Cost Pool Rotumed cheque costs Chequing count reconciliation costs New account setup Photocopies of cancelled cheques Cost Cost Driver $3,000,000 Number of returned cheques 60.000 Number of count reconciliation requests 780,000 Number of new accounts 300,000 Number of cancelled cheque copy requests 225.000 Por product group (type of chequing account) $4,365,000 Web site maintenance online banking) Total Chequing account costs Annual activity Information related to cost drivers Cost Pool All Products Returned cheque costs Cheque reconciliation costs New accounts Cancelled cheque photocopies 200,000 returned cheque 3,000 chequing account reconciliation 80,000 new account 80,000 cancelled cheque photoco reques 10 types of chequing accoun Money Market Chequing 18.00 420 20,000 50,000 requests Web site costs Required: a) Calculate the cost rale per cost driver activity for each of the five cost pools. Round to the nearest dollar b) Calculate the total cost assigned to the "Money Market" chegung account. Round to the nearest dollar c) Suppose that Easy Credit Financial allocates overhead using the number of sheguing accounts as the allocation base and one coat pool Determine the cost rate per shequing account and the per account car assigned to the "Money Market" cheguing account. Explain in detail the difference in cost allocations between this method and the ABC approach

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