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Rock Solid Bank and Trust (RSB&T) offers only checking accounts. Customers can write checks and use a network of automated teller machines. RSB&T eans revenue
Rock Solid Bank and Trust (RSB&T) offers only checking accounts. Customers can write checks and use a network of automated teller machines. RSB&T eans revenue by investing the money deposited; currently, it averages 5.60 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.40 percent on all deposits. A recent study classified the bank's annual operating costs into four activities Activity Using ATM Visiting branch Processing transaction Managing functions Cost Driver Cost 1,260,000 Driver Volume Number of uses Number of visits Number of transactions Total deposits 1,800,000 uses 64,000 visits 820,000 78,000,000 transactions 8,010,000 $445,000,000 in deposits Total overhead S 17,422,000 Data on two representative customers follow: Customer A Customer B 270 ATM uses Branch visits Number of transactions Average deposit 220 50 $7,400 2,150 $7,400 Required a. Compute RSB&Ts operating profits atin b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs are 4 percent of deposits. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 0.40 percent of deposits; operating costs Profit Per Customer Customer A Customer B
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