Activity-Based Costing for a Service Business Metropolitan Bank uses activity-ba

Question

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 $2.80 per teller transaction, $0.12 per canceled check, and $0.08 per ATM transaction. Julie Campbell had 8 teller transactions, 86 canceled checks, and 25 ATM transactions during the month. Determine the total monthly activity-based cost for Campbell during the month. Round your answer to the nearest cent.

Explanation / Answer

Metropolitan Bank

Total monthly activity-based cost for Campbell: $34.72

Comfort Step Company

a. Total sales order processing and shipping cost: $326000

b. Per unit sales order processing and shipping cost: $32.60 per unit

$326000/10000 units = $32.60

Activity Pool Activity Rate $ Usage Cost $ Teller transaction processing 2.80 8 22.40 Check processing 0.12 86 10.32 ATM transaction 0.08 25 2.00 Total $ 34.72

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