Biltmore Financial is a banking services company that offers many different types of checking accounts. The bank has recently adopted an activity-based costing system to assign costs to their various types of checking accounts. The following data relate to the money market checking accounts, one of the popular checking accounts, and the ABC cost pools: Annual number of accounts = 60,000 accounts Checking account cost pools: Cost Pool Cost Cost Drivers Returned check costs $3,000,000 Number of returned checks Checking account reconciliation costs 60,000. Number of account reconciliation requests New account setup 650,000 Number of new accounts Copies of cancelled checks 400,000 Number of cancelled check copy requests Online banking web site maintenance 195,000 Per product group (type of account) Total checking account costs $4,305,000 Annual activity information related to cost drivers: Cost Pool All Products Money Market Checking Returned check 200,000 returned checks 18,000 Check reconciliation costs 3,000 checking account 420 New accounts 60,000 new accounts 15,000 Cancelled check copy requests 100,000 cancelled check 60,000 Web site costs 10 types of accounts 1
Calculate the overhead cost per account for the Money Market Checking.