Calculating ABC Unit Costs Community Credit Union has collected the following information for four activities and...

Calculating ABC Unit Costs

Community Credit Union has collected the following information for four activities and two types of credit cards:

Activity	Driver	Classic	Gold	Activity Rate
Processing transactions	Transactions processed	20,000	12,000	$0.20
Preparing statements	Number of statements	20,000	12,000	0.85
Answering questions	Number of calls	40,000	60,000	2.00
Providing ATMs	ATM transactions	80,000	24,000	1.80

There are 12,500 holders of Silver cards and 50,000 holders of Premium cards.

Required:

Calculate the unit cost (rounded to the nearest cent) for Silver and Premium credit cards.

Unit cost for Silver	$
Unit cost for Premium	$

Expert Solution

				Total cost
Driver	Classic	Gold	Activity Rate	Classic	Gold
Transactions processed	20,000	12,000	0.20	$ 4,000	$ 2,400
Number of statements	20,000	12,000	0.85	$ 17,000	$ 10,200
Number of calls	40,000	60,000	2.00	$ 80,000	$ 1,20,000
ATM transactions	80,000	24,000	1.80	$ 1,44,000	$ 43,200
		Total cost for the cards		$ 2,45,000	$ 1,75,800
		Number of cards		$ 12,500	$ 50,000
		Unit cost		$ 19.60	$ 3.52
Unit costs for the two cards are $19.60 and $3.52.
PLEASE NOTE THAT THE NAMES OF THE CARDS IN COLUMN 4 & 5 OF THE TABLE ARE GIVEN
AS CLASSIC AND GOLD; BUT MENTIONED AS SILVER AND PLATINUM THEREAFTER.
PLEASE USE NAMES APPROPRIATELY IN THE ANSWER, AFTER CHECKING WHICH IS CORRECT.

ekkarill92 answered 2 years ago

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