36.

Merriman 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 Departments A and B as follows:

Department A Department B

Account inquiry hours 2,000 hours 4,000 hours

Account billing l 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 account verification costs will be assigned to Department A?

Select one:

a.

$30,000

b.

$37,500

c.

$150,000

d.

$10,000