The Owl National Bank is analyzing its existing cost system for services so that it can determine the true cost of its services for pricing purposes. The bank's controller has been researching the use of activity based costing for all operations, but specifically for the teller operations. After performing an analysis of what tellers do for customers on a recurring basis, he has identified five different activities that a teller may perform for a customer, with the related information for those activities for a normal month, provided in the table attached. Currently, the bank is using the number of teller hours as the basis for costing a service. On average, the bank records 450 hours per month for tellers. In conjunction with this, the bank is considering the creation of a brand new type of checking account for senior citizens. It has been estimated that the attached volume of activity will occur on average for these accounts. The bank wants to set a price that earns a 25% markup on its cost. e 15,000 Ne (2) REQUIRED: (1) Using the attached answer sheet, calculate the rate that the bank is currently using to estimate the costs of providing services to customers. Round your answer to four decimal places. Using the attached answer sheet, calculate the rates that the bank would use to estimate the costs of providing services to customers if it decides to use activity based costing. Round all answers to four decimal places. Using the attached answer sheet, calculate the cost of the new senior citizen account if the bank uses its existing cost system to calculate the cost. Round your answer to the nearest cent (two decimal places). What would be the price that it would charge senior citizens for this type of account using this costing method? (3) YARI LA ME (4) Using the attached answer sheet, calculate the cost of the new senior citizen account if the bank uses activity based costing to calculate the cost. Round your answer to the nearest cent (two decimal places). What would be the price that it would charge senior citizens for this type of account using activity based costing? OWL NATIONAL BANK ACTIVITIES PERFORMED BY TELLERS WITH ESTIMATED COSTS AND COST DRIVERS TIHE Acti Activity Deposit Transaction Withdrawal Transaction Answer Questions Sell Cashier's Checks, Money Orders, etc. Balance the Drawer Deposit Transactions Withdrawal Transactions Estimated Cost $ $ Activity Cost Driver 15,000 Number of Deposit Transactions 13,000 Number of Withdrawal Transactions 8,000 Number of Customer Questions 1,000 Number of Items Sold 1,200 Number of Drawers Balanced 38,200 OWL NATIONAL BANK ESTIMATED ACTIVITY VOLUME FOR VARIOUS TRANSACTIONS Average Monthly Volume 2.5 5.5 3.0 1.0 Customer Questions Number of Cashier's Checks, Money Orders, etc., Sold Estimated Cost Driver Units 40.000 30,000 40,000 1,200 1,300 Average Total Teller Time Used 5 minutes: 12 minutes 4 minutes 4 minutes (1) (2) OWL NATIONAL BANK CALCULATION OF CURRENT COST RATE FOR SERVICES TO CUSTOMERS USING EXISTING COSTING METHOD Total Estimated Cost of Services to Customers Divided By Total Estimated Teller Hours Cost of Services to Customers Under Existing Costing Method (per teller hour) OWL NATIONAL BANK CALCULATION OF COST RATES FOR SERVICES TO CUSTOMERS USING ACTIVITY BASED COSTING METHOD otal Estimated Costs of Deposit Transactions Divided By Total Cost Driver Units Estimated Cost of Deposit Transaction (per deposit) Total Estimated Costs of Withdrawal Transactions Divided By Total Cost Driver Units Estimated Cost of Withdrawal Transaction (per withdrawal) Total Estimated Costs of Answer Questions Transactions Divided By Total Cost Driver Units Estimated Cost of Answer Question Transaction (per question) Total Estimated Costs of Selling Cashier's Checks, etc. Transactions Divided By Total Cost Driver Units Estimated Cost of Selling Cashier's Checks, etc. Transaction (per item) Total Estimated Costs of Balance the Drawer Transactions Divided By Total Cost Driver Units Estimated Cost of Selling Cashier's Checks, etc. Transaction (per item) (3) (4) OWL NATIONAL BANK OF SENIOR CITIZEN ACCOUNT COST AND CHARGES USING EXISTING COST SYSTEM CALCULATION Deposit Transactions Withdrawal Transactions Customer Questions Transactions Number of Cashier's Checks, Etc. Transactions Total Cost of Senior Citizen Account Using Existing Cost System Total Cost of Senior Citizen Account Using Existing Cost System Times Markup Requirement Price Needed To Be Charged For Senior Citizen Account OWL NATIONAL BANK CALCULATION OF SENIOR CITIZEN ACCOUNT COST AND CHARGES USING ACTIVITY BASED COST SYSTEM Deposit Transactions Withdrawal Transactions Customer Questions Transactions Number of Cashier's Checks, Etc. Transactions Total Cost of Senior Citizen Account Using Activity Based Costing Total Cost of Senior Citizen Account Using Activity Based Costing Times Markup Requirement Price Needed To Be Charged For Senior Citizen Account