Uncertain information, actual versus estimated costs, practical capacity ---Data Practices performs credit card services for banks. The company uses an ABC system. The following information applies to the past year:

A. Are the activities listed likely to be the only possible set of activities for the ABC system? Why or why not?
B. Using estimated values for cost and volume, calculate an ABC allocation rate for each activity.
C. Explain why actual costs and volumes are likely to be different from estimated amounts.
D. Is practical capacity likely to be higher or lower than the estimated volume? Explain

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Estimated Actual Cost $3,000,000 S2.200,000 Number of transactions 1,000,000 500,000 100,000 Cost Cost Driver Activity Processing transactions Issuing monthly statements Issuing new credit cards Resolving billing disputes Total 1,500,000 400,000 110,000 Number of statements Number ofnew credit cards Number of disputes S4,600,000 S4,210,000 Estimated Actual Volume 5,000,0005.800,000 250,000 100,000 Volume Cost Driver Number of transactions Number of statements Number of new credit cards 270,000 110,000 3,500 Number of disputes 3.000