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