(Solution) - The manager of the Avon branch of First Bank of -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Pages: 5 Words: 1375

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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?