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Rock solid bank Rock Solid Bank and Trust (RSB&T) offers only checking accounts. Customers can write checks and use a network of automated teller machines.
Rock solid bank
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 6.90 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. Data on two representative customers follow. 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 (=$40,500,000/$1,012,500,000) 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. Compute RSB\&T's operating profitsStep by Step Solution
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