E6–5 Time allowed: 20 minutes

(This exercise is a continuation of E6–4; it should be assigned only if E6–4 is also assigned.) The manager of the Westfield branch of Security Home Bank has provided the following data concerning the transactions of the branch during the past year:

The lowest costs reported by other branches for these activities are displayed below:

Required 1 Using the first-stage allocation from E6–4 and the above data, compute the activity rates for the activity-based costing system. (Use Exhibit 6.5 as a guide.) Round all computations to the nearest whole pence.
2 What do these results suggest to you concerning operations at the Westfield branch?

Activity Opening accounts Processing deposits and withdrawals Processing other customer transactions Total activity at the Westfield Branch 500 new accounts opened 100,000 deposits and withdrawals processed 5,000 other customer transactions processed