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Monona Bank offers checking accounts and invest the money deposited. Monona Bank averages 6% return...

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Accounting

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Monona Bank offers checking accounts and invest the money deposited. Monona Bank averages 6% return annually on its investments. Monona Bank pays depositors 1% on all deposits. A recent study classified the operating costs of the bank into four activities, as shown below. Activity Use ATM Visit branch Process transaction General bank overhead Total overhead Cost Driver number of uses number of visits number of transactions total deposits Cost $ $ $ $ $ Volume 2,000,000 10,000,000 uses 6,000,000 750,000 visits 4,000,000 40,000,000 transactions 8,000,000 $ 450,000,000 dollars 20,000,000 Data on two representative customers are shown below: Type: Student Type: Accountant ATM uses $ 300 $ 50 Branch visits $ 5 $ 20 Number of transactions $ 60 $ 1,200 Average deposit $ 450 $ 10,000 (a) Compute the operating profit for Monona Bank (b) Compute the profit of the two customer types, assuming that customer costs are based only on deposits. (c) Compute the profit of the two customer types using ABC

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