EXERCISE 8-10 (20 MINUTES)

1. Computation of activity rates:

Total (a)

Activity Cost Pools

Cost (b)

Total Activity (a) ÷ (b)

Activity Rate

Opening accounts... $23,250 500 new accounts

opened $46.50 per new account

opened

$1.08 per deposit or

Processing deposits and withdrawals ...$107,750 100,000 deposits and

withdrawal

withdrawals

processed

Processing other customer transactions . $62,500 5,000 other customer

$12.50 per other customer

transactions

transaction