The manager of the Avon branch of First Bank of Eagle has provided the following data concerning the transactions of the branch during the past year:

Activity Total Activity at the Avon Branch

Opening accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 accounts opened

Processing deposits and withdrawals . . . . . . . . . . . . 50,000 deposits and withdrawals

Processing other customer transactions . . . . . . . . . . 1,000 other customer transactions

The lowest costs reported by other branches for these activities are displayed below:

Lowest Cost Among

Activity All First Bank of Eagle Branches

Opening accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . $24.35 per account opened

Processing deposits and withdrawals . . . . . . . . . . . . $2.72 per deposit or withdrawal

Processing other customer transactions . . . . . . . . . . $48.90 per other customer transaction

Required:

1. Using the first-stage allocation from Exercise 8-10 and the above data, compute the activity rates for the activity-based costing system. Round all computations to the nearest whole cent.

2. What do these results suggest to you concerning operations at the Avon branch?