KE a math Myaccountinglab- FALL 2018-ACCT116B (64938-L) Acct 116B Fall 2018 ONLI
ID: 2337889 • Letter: K
Question
KE a math Myaccountinglab- FALL 2018-ACCT116B (64938-L) Acct 116B Fall 2018 ONLINE CRN 64938 (1) Quiz: Quiz #2 Chs 3,4 This Question: 2 pts 40f 11 (0 c Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Account inquiry (hours) Account billing (lines) Account verification (accounts) Correspondence (letters) Potter & Weasley uses activity based costing. Indirect Activity Costs $85,000 $56,000 $38,250 $77,000 Allocation Base 4,000 35,000 27,500 10,000 The above activities are used by Departments P and Q as follows: Account inquiry (hours) Account billing (lines) Account verification (accounts) Department PDepartment Q 600 4,000 7,000 400 10,000 6,000Explanation / Answer
B. $12750 ,
Account Enquiry cost to Department Q = cost per driver unit * Department Q hours
= [Activity cost / allocation base] * 600.
= [$85000 / 4000] * 600
= $21.25 * 600
= $12750
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