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 7.00 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.60 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	$	2,400,000		3,000,000	uses
Visiting branch	Number of visits		800,000		160,000	visits
Processing transaction	Number of transactions		8,100,000		90,000,000	transactions
Managing functions	Total deposits		7,650,000	$	425,000,000	in deposits
Total overhead		$	18,950,000

Data on two representative customers follow:

	Customer A			Customer B
ATM uses		290			340
Branch visits		5			18
Number of transactions		45			1,950
Average deposit	$	7,000		$	7,000

Required:

a. Compute RSB&T's operating profits.

OPERATING PROFITS:__________

b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs = 0.60 percent of deposits; operating costs are 6 percent of deposits. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

CUSTOMER A PROFIT:______ CUSTOMER B PROFIT:_______

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. (Do not round intermediate calculations. Round your answers to 2 decimal places. Loss amounts should be indicated by a minus sign.)

SALES REVENUE CUSTOMERS A,B: _____,_____

INTEREST ON DEPOSIT CUSTOMERS A,B:______,_____

TOTAL OPERATING COST CUSTOMERS A,B:_____,______

CUSTOMER PROFIT/LOSS CUSTOMERS A,B:______,______