eBook Show Me How Calculator Activity-Based Costing for a Service Business Metro
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Activity-Based Costing for a Service Business
Metropolitan Bank uses activity-based costing to determine the cost of servicing customers. There are three activity pools: teller transaction processing, check processing, and ATM transaction processing. The activity rates associated with each activity pool are $3.20 per teller transaction, $0.20 per canceled check, and $0.08 per ATM transaction. Julie Stone had 8 teller transactions, 86 canceled checks, and 20 ATM transactions during the month.
Determine the total monthly activity-based cost for Stone during the month. Round your answer to the nearest cent.
Explanation / Answer
Monthly Activty Based Cost 44.40 Statement showing computations Activity Pools No of Activity = a Activity Rate = b Total Activity Cost = a*b teller transaction processing 8.00 3.20 25.60 check processing 86.00 0.20 17.20 ATM transaction processing. 20.00 0.08 1.60 Monthly Activty Based Cost 44.40
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