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TriTown Financial is a banking services company that offers many different types of checking accounts. It has recently adopted an activity-based costing system to
TriTown Financial is a banking services company that offers many different types of checking accounts. It has recently adopted an activity-based costing system to assign costs to various types of checking accounts. The following data relate to one type of checking account, the money market checking account, and the ABC cost pools: Total Number of Checking Accounts 221,400 Number of Money Market Checking Accounts 70,000 Checking account cost pools: Cost Pool Cost Cost Driver Returned check costs $3,200,000 Number of returned checks Checking account reconciliation costs 63,000 Number of account reconciliation requests New account setup 840,000 Copies of cancelled checks 300,800 Number of new accounts Number of cancelled check copy requests Website maintenance (for online banking) 225,000 Per product group (type of checking account) Total checking account costs $4,628,800 Annual activity information related to cost drivers: Money Market Cost Pool Returned checks Check reconciliation costs New accounts All Products Checking 200,000 returned checks 18,000 3,000 checking account reconciliations 430 60,000 new accounts 20,000 Cancelled check copy requests Website costs 80,000 cancelled check copy requests 50,000 10 types of checking accounts 1
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