Question
1) Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activitycost drivers Account inquiry $320,000 16,000 hours Account billing $220,000 4,000,000 lines
1) Extreme Manufacturing Company provides the following ABC costing information:
Activities | Total Costs | Activitycost drivers | |
Account inquiry | $320,000 | 16,000 hours | |
Account billing | $220,000 | 4,000,000 lines | |
Account verification accounts | $182,000 | 80,000 accounts | |
Correspondence letters | $25,000 | 4,000 letters | |
Total costs | $747,000 |
The above activities are used by Departments A and B as follows:
Department A | Department B | ||
Account inquiry hours | 2,200 hours | 3,700 hours | |
Account billing lines | 600,000 lines | 450,000 lines | |
Account verification accounts | 5,000 accounts | 3,000 accounts | |
Correspondence letters | 1,000 letters | 1,400 letters |
How much of the account billing cost will be assigned to Department B?
A.
$110,000
B.
$220,000
C.
$33,000
D.
$24,750
2) Extreme Manufacturing Company provides the following ABC costing information:
Activities | Total Costs | Activitycost drivers | |
Account inquiry | $390,000 | 13,000 hours | |
Account billing | $275,000 | 5,000,000 lines | |
Account verification accounts | $130,500 | 60,000 accounts | |
Correspondence letters | $22,000 | 4,000 letters | |
Total costs | $817,500 |
The above activities are used by Departments A and B as follows:
Department A | Department B | ||
Account inquiry hours | 2,500 hours | 4,000 hours | |
Account billing lines | 800,000 lines | 650,000 lines | |
Account verification accounts | 9,000 accounts | 7,000 accounts | |
Correspondence letters | 2,000 letters | 2,400 letters |
How much of correspondence costs will be assigned to Department A?
A.
$11,242
B.
$22,000
C.
$11,000
D.
$49,500
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