Compute the total cost assigned to the money market

Reference no: EM13478007

Biltmore 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 = 60,000 accounts

Checking account cost pools:

Cost Pool	Cost	Cost Drivers
Returned check costs	$3,000,000	Number of returned checks
Checking account reconciliation costs	60,000	Number of account reconciliation requests
New account setup	650,000	Number of new accounts
Copies of cancelled checks	400,000	Number of cancelled check copy requests
Online banking web site maintenance	195,000	Per product group (type of account)
Total checking account costs	$4,305,000

Annual activity information related to cost drivers:

Cost Pool	All Products	Money Market Checking
Returned check	200,000 returned checks	18,000
Check reconciliation costs	3,000 checking account	420
New accounts	60,000 new accounts	15,000
Cancelled check copy requests	100,000 cancelled check	60,000
Web site costs	10 types of accounts	1

Calculate the total cost assigned to the money market checking account.

Reference no: EM13478007

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