Question

Show a Score: 0 of 1 pt 5 of 5 (1 complete) HW Score: 20%, 1 of 5 pts E5-30 (book/static) Question Help Walliston direct prote ional costs wws: United Savings Bank (USB) is examining the profitability of its Premier Account, a combined savings and checking account. (Click the icon to view account information.) USB recently conducted an activity based costing study of its services. It assessed the following costs for six individual services. The use of these services in 2017 by three customers is as follows: (Click the icon to view the costs for the services and customer information.) Assume Lindell and Colston always maintain a balance above $1,000, whereas Welker always has a balance below $1,000 Read the requirements Lindell Welker Colston Total Revenues Spread revenues on annual basis profession Monthly fee charges Total revenues Costs rprises Deposit/withdrawal with teller Deposit/withdrawal with ATM Deposit/withdrawal on prearranged basis Bank checks written Foreign currency drafts Inquiries am Enterpris al labor-ho mounts WG unts billed it or professi Total costs Enter any number in the edit fields and then click Check Answer. 3 parts remaining Clear All Check Answer MacBook Air

Answer 1

1.

	Lindell	Welker	Colston	Total
Revenues
Spread revenues on annual basis	$          36.00	$          21.00	$        747.00	$        804.00
Monthly fee charges		$        264.00		$        264.00
Total Revenues	$          36.00	$        285.00	$        747.00	$     1,068.00
Costs
Deposits/withdrawl with teller	$        110.00	$        122.50	$          10.00	$        242.50
Deposits/withdrawl with ATM	$             9.60	$          19.20	$          10.40	$          39.20
Deposits/withdrawl on prearranged basis	$                 -	$             7.00	$          29.00	$          36.00
Bank checks written	$          65.60	$          16.40	$          24.60	$        106.60
Foreign Currency Drafts	$          72.60	$          12.10	$          60.50	$        145.20
Inquiries	$          11.90	$          27.20	$          10.20	$          49.30
Total Costs	$        269.70	$        204.40	$        144.70	$        618.80
Operating Income (Loss)	$       -233.70	$          80.60	$        602.30	$        449.20

2.
It is clearly evident from above that by keeping balance above minimum limit by marginally, customer is able to take benefit of free services throughout the year. But costs of the services is very high compared to revenues generated from that customer. This loss from one customers lowers the income of bank as a whole.

3.
Either minimum balance should be increased substantially or service fee as per services should be charged from customers so as to atleast cover the costs