Tannhauser Financial is a banking services company that offers many different types of checking accounts. It has recently adopted an activity-based costing system to assign costs to various types of checking accounts. The following data relate to one type of checking account, the money market checking account, and the ABC cost pools:
Money Market Checking Account:
Annual number of accounts 60,000 accounts
Checking account cost pools:

Annual activity information related to cost drivers:
.

Required
a. Calculate the cost rate per cost driver activity for each of the five cost pools. Round to two decimal places
b. Calculate the total cost assigned to the money market checking account.
c. Suppose that Tannhauser Financial allocates overhead using the number of checking accounts as the allocation base and one cost pool. Determine the cost rate per checking account and the per account cost assigned to the money market checking account. Discuss the difference in cost allocations between this method and the activity-based costingapproach.

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Cost Pool Returned check costs Checking account Cost Cost Driver $3,000,000 Number of returned checks reconciliation requests Number of cancelled check Per product group (type of Number of account reconciliation costs New account setup Copies of cancelled checks 60,000 780,000 400,000 Number of new accounts copy requests Web site maintenance (for online banking) Total checking account costs 195,000 $4,435,000 checking account) Cost Pool Returned checks Check reconciliation Money Market Checking 18,000 All Products 200,000 returned checks 420 costs New accounts Cancelled check 3,000 checking account reconciliations 60,000 new accounts 15,000 100,000 cancelled check copy requests 10 types of checking accounts 60,000 copy requests Web site costs