Reference no: EM13947132
Baller Financial is a banking services company that offers many different types of checking accounts. The bank has recently adopted an activity-based costing system to assign costs to their various types of checking accounts. The following data relate to the money market checking accounts, one of the popular checking accounts, and the ABC cost pools: Annual number of accounts = 52,000 accounts Checking account cost pools:
Cost Pool Cost Cost Drivers
Returned check costs $2,790,000 Number of returned checks
Checking account reconciliation costs 52,000 Number of account reconciliation requests
New account setup 638,000 Number of new accounts
Copies of cancelled checks 397,000 Number of cancelled check copy requests
Online banking web site maintenance 188,000 Per product group (type of account)
Annual activity information related to cost drivers:
Cost Pool All Products Money Market Checking
Returned check 196,000 returned checks 18,000
Check reconciliation costs 397,000 checking account 420
New accounts 54,000 new accounts 15,000
Cancelled check copy requests 100,000 cancelled check 60,000
Web site costs 1 types of accounts 1
Calculate the overhead cost per account for the Money Market Checking.
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