Computing and Interpreting Activity Rates [LO3]

(This exercise is a continuation of Exercise 7–7 ; it should be assigned only if Exercise 7–7 is also assigned.) The manager of the Avon branch of First Bank of Eagle 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 Exercise 7–7 and the above data, compute the activity rates for the activity-based costing system. (Use Exhibit 7–6 as a guide.) Round all computations to the nearest whole cent.
2. What do these results suggest to you concerning operations at the Avon branch?

Activity Opening accounts... Processing deposits and withdrawals Processing other customer transactions... Total Activity at the Avon Branch 200 accounts opened 50,000 deposits and withdrawals 1,000 other customer transactions