The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year:
Activity................................................. Total Activity at the Westfield Branch
Opening accounts .......................................................................... 500 new accounts opened
Processing deposits and withdrawals................ 100,000 deposits and withdrawals processed
Processing other customer transactions.............. 5,000 other customer transactions processed
The lowest costs reported by other branches for these activities are displayed below:
Activity.........................Lowest Cost among All Security Home Bank Brances
Opening accounts ..................................................................... $26.75 per new account
Processing deposits and withdrawals .......................... $1.24 per deposit or withdrawal
Processing other customer transactions .............. $11.86 per other customer transaction
Required:
1. Using the first-stage allocation from Exercise 7-9 and the above data, compute the activity rates for the activity-based costing system. (Use Exhibit 7-6 as a guide.) Round all computations to the nearest whole cent.
2. What do these results suggest to you concerning operations at the Westfield branch?