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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 earns revenue

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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 earns revenue by investing the money deposited currently, it averages 6.20 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 Coot Driver Cost Driver Volume Uning ATM Number of uses $ 3,000,000 4,000,000 uses Visiting branch Number of visits 1,800,000 300,000 visita Processing transaction Number of transactions 13,200,000 160,000,000 transactions Managing functions Total deposits 12,000,000 $750,000,000 in deposits Total overhead $30,000,000 Data on two representative customers follow. ATH uses Branch visits Number of transactions Average deposit Customer Customer B 100 200 5 20 40 1,500 56.000 $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 ($30,000,000/$750,000,000) 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

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