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Fran Ferry Company had the following activities, pooled costs, and physical flow of driver units. The company uses activity-based costing. Activities Account Inquiry (hours)
Fran Ferry Company had the following activities, pooled costs, and physical flow of driver units. The company uses activity-based costing. Activities Account Inquiry (hours) Pooled Cost $200,000 Account Billing (Lines) $140,000 Account Verification (accounts) $5000 Correspondence(letters) $25,000 The above activities are used by departments A and B as follows: Account Inquiry (hours) Account Billing (Lines) Account Verification (accounts) Correspondence (letters) Required: Department A 1,000 200,000 5,000 500 1. How much of the Account Inquiry cost, Account Billing Cost, Account Verification Cost and Correspondence Cost will be assignmed to Department A & Department B ? Physical Flow of Driver Units 5000 (hours) 2,000,000 lines 20,000 accounts 2,000 letters Department B 2,000 100,000 4,000 800
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