Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 earns revenue

image text in transcribed
image text in transcribed
image text in transcribed
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 earns revenue by investing the money deposited: currently, it averages 5.70 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.50 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 Total overhead Cost Driver Number of uses Number of visits Number of transactions Total deposits Cost $ 2,250,000 1,350,000 9,900, 9,000,000 $22, see, Driver Volume 3,000,000 uses 225,000 visits 120,000,eee transactions $562,500,000 in deposits Data on two representative customers follow. Customer A Customer B 100 ATM uses Branch visits Number of transactions Average deposit $6,000 1,500 $6,000 Required: a. Compute RSB&T's operating profits b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs 0.50 percent of deposits operating costs are 4 percent = $22,500,000/$562,500,000) of deposits c. Compute the profit from Customer A and Customer B, assuming that customer costs are computed using the information in the activity-based costing analysis. Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute RSBXT's operating profits. Operating proft Required B > Required: a. Compute RSB&T's operating profits b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits, interest cos 0.50 percent of deposits operating costs are 4 percent ($22,500,000/$562,500,000) of deposits. c. Compute the profit from Customer A and Customer B, assuming that customer costs are computed using the information in th activity-based costing analysis. Complete this question by entering your answers in the tabs below. Required A Required B Required Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs = ((0.5:, *0.00) percent of deposits; operating costs are 4 percent ( $22,500,000/$562,500,000) of deposits. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Profit Per Customer Customer A Customer Proy 1 of 7 i Next search Required: . Compute RSB&T's operating profits. b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs 0.50 percent of deposits, operating costs are 4 percent (= $22,500,000/$562,500,000) of deposits. C. Compute the profit from Customer A and Customer B, assuming that customer costs are computed using the information in the activity-based costing analysis Complete this question by entering your answers in the tabs below. Required A Required B Required Compute the profit from Customer A and Customer B, assuming that customer costs are computed using the information in the activity-based costing analysis. (Do not round intermediate calculations. Round your answers to 2 decimal places. Loss amounts should be indicated by a minus sign.) Customer A Customer B Sales revenue Interest on deposit Total operating cost Customer profit/loss Required B Required Prey 1 of 7 !! Next > earch DOLL

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Security And Controls Of Windows Active Directory Domains

Authors: Derek Melber

1st Edition

0894135635, 978-0894135637

More Books

Students also viewed these Accounting questions