Fifth Third Bank Is a Banking Services Company That Offers $\text { Annual number of accounts }=60,000 \text { accounts }$

question 122

Multiple Choice

Fifth Third Bank is a banking services company that offers several different types of checking accounts. The bank has recently adopted an activity-based costing system to assign costs to its checking accounts. The following data relate to the Mind Your Money checking accounts and the ABC cost pools: $\text { Annual number of accounts }=60,000 \text { accounts }$
$\begin{array}{lrll}\text { Cost Pool}&\text { Cost }&\text {Cost Drivers }\\\hline\text { Returned check costs } & \$ 3,000,000 & \text { Number of returned checks } \\\text { Account reconciliation costs } & 60,000 & \text { Number of account reconciliation requests } \\\text { New account setup } & 650,000 & \text { Number of new accounts } \\\text { Archive requests } & 400,000 & \text { Number of archive requests } \\\text { Web site costs } & 195,000 & \text { Per account type }\\\text { Total checking account costs }&\$4,305,000\end{array}$

$\text { Annual activity information related to cost drivers: }$
$\begin{array}{llr}\text { Cost Pool }&\text {All Products }&\text {Mind Your Monev Checking }\\\hline\text { Returned checks } & 200,000 \text { returned checks } & 18,000 \\\text { Account reconciliation costs } & 3,000 \text { reconciliation requests } & 420 \\\text { New account setups } & 60,000 \text { new accounts } & 15,000 \\\text { Archive requests } & 100,000 \text { archive requests } & 60,000 \\\text { Web site costs } & 10 \text { types of accounts } & 1\end{array}$ How much is the rate to be used to allocate account reconciliation cost to each Mind Your Money checking account?

• A) $20.00
• B) $1.00
• C) $0.14
• D) $142.85

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Definitions:

Zooplankton

Small floating or weakly swimming organisms that are a component of the aquatic food web.

Freshwater Supply

Refers to the availability of water from sources such as rivers, lakes, and aquifers that is not salty and is vital for human consumption, agriculture, and supporting biodiversity.

River Zone

The area or region surrounding a river, including its banks and adjacent land, which can play critical roles in ecosystem function and biodiversity.

Source Zone

The specific location or area where pollutants originate and from which contamination spreads to surrounding environments.