Exercise 10-32 (Algo) Activity-Based Costing of Customers (LO 10-3, 4) Northwestern Bank (NB) offers only checking accounts. Customers can write checks and use a network of automated teller machines. NB earns revenue by investing the money deposited; currently, it averages 4.1 percent annually on its investments of those deposits. To compete with larger banks, NB pays depositors 0.3 percent on all deposits. A recent study classified the banks annual operating costs into four activities. Activity Cost Driver Cost Driver Volume Using ATM Number of uses $ 1,936,800 3,228,000 uses Visiting branch Number of visits 1,900,800 396,000 visits Processing transactions Number of transactions 8,521,920 129,120,000 transactions Managing functions Total deposits 7,321,600 $ 615,035,000 in deposits Total overhead $ 19,681,120 Data on two representative customers follow: Emily Jacob ATM uses 40 130 Branch visits 5 45 Number of transactions 200 520 Average deposit $ 10,000 $ 10,000