The University Credit Union has engaged your services to determine the cost of i
ID: 2583404 • Letter: T
Question
The University Credit Union has engaged your services to determine the cost of its various activities. The following data are available for a representative branch.
Process deposits
Process checks
Balance inquiries
Other activities
Total cost
Tellers
30%
40%
10%
20%
$150,000
Asst Mgr
10%
10%
5%
75%
75,000
Manager
2%
3%
5%
90%
90,000
The average branch processes 600,000 deposits and 1,250,000 check transactions each year.
1-1. Compute cost per deposit
1-2. Compute cost to process a check
Process deposits
Process checks
Balance inquiries
Other activities
Total cost
Tellers
30%
40%
10%
20%
$150,000
Asst Mgr
10%
10%
5%
75%
75,000
Manager
2%
3%
5%
90%
90,000
Explanation / Answer
1. cost per deposit = ((150000*30%)+(75000*10%)+(90000*2%))/600000 = $0.09
2. cost to process a check = (150000*40%)+(75000*10%)+(90000*3%) = 70200
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