After examining the three branch banks' indirect costs (that is, the cost items making up the branch banks' noninterest operating expenses), the ABC team clas- sified the annual costs in each...

After examining the three branch banks' indirect costs (that is, the cost items making up the branch banks' noninterest operating expenses), the ABC team clas- sified the annual costs in each activity's cost pool (hereafter, all numbers are in thousands) as shown in Exhibit B. 1 An activity's cost pool is simply a grouping, or aggregation, of all the individual costs associated with that activ- ity. The bank's ABC team created separate activity cost pools for the costs associated with each of the three activities: (1) paying checks, (2) providing teller services, and (3) responding to customer account inquiries.