Styles EasyCredit Financial is a banking services company that offers many different types of chequing accounts. It has recently adopted an activity-based costing (ABC) system to assign costs to various types of chequing accounts. The following data relate to one type of chequing account, the "money market" chequing account, and the ABC cost pools: Total number of chequing accounts: 221,750 Number of "money market chequing accounts: 70.000 Chequeing Account Cost Pools Cost Pool Cost Cost Driver Returned cheque costs $3,000,000 Number of returned cheques Shequing account reconciliation costs 60,000 |Number of account reconciliation requests New account setup 780.000 Number of new accounts Photocopies of cancelled cheques 300,000 Number of cancelled cheque copy requests Web site maintenance (online banking) 225,000 Per product group (type of chequing account) Total Chequing account costs $4,365,000 Annual activity information related to cost drivers Cost Pool All Products Money Market Chequing Returned cheque costs 200,000 returned cheques 18.000 Cheque reconciliation costs 3,000 chequing account reconciliations 420 New accounts 60.000 new accounts 20.0000 Cancelled cheque photocopies 80,000 cancelled cheque photocopy 50,000 requests requests Web site costs 10 types of chequing accounts Required: a) Calculate the cost rate per cost driver activity for each of the five cost pools. Round to the nearest dollar. b) Calculate the total cost assigned to the "Money Market" chequing account. Round to the nearest dollar. c) Suppose that EasyCredit Financial allocates overhead using the number of chequing accounts as the allocation base and one cost pool. Determine the cost rate per chequing account and the per account cost assigned to the "Money Market" chequing account. Explain in detail the difference in cost allocations between this method and the ABC approach