Reference no: EM13932943
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 = 56,000 accounts. Checking account pools:
Cost Pool Cost Cost Driver
Returned check cost $2,760,000 # of returned checks
Checking acct recon cost $50,000 # of acct recon requests
new account set up $635,000 # of new accounts
copies of cancelled checks $395,000 # of cancelled check copy requests
Online banking website maintenance $193,000 per product group (type of account)
Annual activity information related to cost drivers:
Cost Pool All Products Money Market Checking
returned checks 193,000 returned checks 18,000
check reconciliation 395,000 checking account 420
new accounts 56,000 new accounts 15,000
cancelled check copy request 91,000 cancelled checks 60,000
website cost 7 types of account 1
Calculate the overhead cost per account for the Money Market Checking?
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