Activities Total Costs Activity-cost drivers Account inquiry hours $400,000 The

Question

Activities

Total Costs

Activity-cost drivers

Account inquiry hours

$400,000

The above activities are used by Department A and B as follows:

Department A

Department B

How much of the inquiry cost will be assigned to Department A?

2.(TCO 1) Merriamn Company provides the following ABC costing information:

Activities

Total Costs

Activity-cost drivers

Account inquiry hours

$400,000

10,000 hours Account billing lines $280,000 4,000,000 lines Account verification accounts $150,000 40,000 accounts Correspondence letters $ 50,000 4,000 letters Total costs $880,000

The above activities are used by Department A and B as follows:

Department A

Department B

Account inquiry hours 2,000 hours 4,000 hours Account billing lines 400,000 lines 200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters

How much of the inquiry cost will be assigned to Department A?

(Points : 5)

Explanation / Answer

$400,000

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