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CoursHeroTranscribedText: Rock Solid Bank and Trust (RSB&T) offers only checking accounts. Customers can write checks and use a network of automated teller machines. RSB&T earns revenue by investing the money deposited; currently, it averages 6.70 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.50 percent on all deposits. A recent study classified the bank's annual operating costs into four activities. 4.28 Activity points Cost Driver Cost Driver Volume Using ATM Number of uses $ 3, 750, 000 5,000, 000 uses Visiting branch Number of visits 2, 250, 090 375 , 000 visits Processing transaction Number of transactions 16, 500, 000 200, 000, 000 transactions eBook Managing functions Total deposits 15, 000, 000 $937, 500,000 in deposits Total overhead $37, 500, 000 References Data on two representative customers follow. Customer A Customer B ATM uses 100 200 Branch visits 20 Number of transactions 40 1, 500 Average deposit $6, 000 $6, 000 Required: a. Compute RSB&T's operating profits. b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs = 0.50 percent of deposits; operating costs are 4 percent (= $37,500,000/$937,500,000) of deposits. c. Compute the profit from Customer A and Customer B, assuming that customer costs are computed using the information in the activity-based costing analysis. Complete this question by entering your answers in the tabs below. E

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