Question
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
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 5.2 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.5 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 $ 1,500,000 2,000,000 uses Visiting branch Number of visits 900,000 150,000 visits Processing transaction Number of transactions 6,600,000 80,000,000 transactions Managing functions Total deposits 6,000,000 $ 375,000,000 in deposits Total overhead $ 15,000,000 Data on two representative customers follow: Customer A Customer B ATM uses 100 200 Branch visits 5 20 Number of transactions 40 1,500 Average deposit $ 6,000 $ 6,000
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.)
What is the total operating cost?
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