Rock Solid Bank and Trust (RSB&T) offers only checking accounts. Customers can write checks and...

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Accounting

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 6.00 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.60 percent on all deposits. A recent study classified the banks annual operating costs into four activities:

Activity Cost Driver Cost Driver Volume
Using ATM Number of uses $ 1,725,000 2,300,000 uses
Visiting branch Number of visits 845,000 169,000 visits
Processing transaction Number of transactions 7,304,000 83,000,000 transactions
Managing functions Total deposits 7,050,000 $ 470,000,000 in deposits
Total overhead $ 16,924,000

Data on two representative customers follow:

Customer A Customer B
ATM uses 270 320
Branch visits 7 19
Number of transactions 50 2,400
Average deposit $ 7,900 $ 7,900

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b. Compute the profit from customer A and customer B assuming that customer costs are based only on deposits. Interest costs 0.60 percent of deposits; operating costs are 5 percent of deposits (Do not round intermediate calculations. Round your answers to 2 decimal places. Customer B

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