Merriman Company provides the following ABC costing information:

Activities Total Overhead Costs Activity-cost drivers

Account inquiry hours $400,000 10,000 hours

Account billing lines $280,000 4,000,000 lines

Account verification queries $150,000 40,000 queries

Correspondence letters $ 50,000 4,000 letters

Total overhead costs $880,000

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

Activities Department A Department B

Account inquiry hours 2,000 hours 4,000 hours

Account billing lines 400,000 lines 200,000 lines

Account verification queries 10,000 queries 8,000 queries

Correspondence letters 1,000 letters 1,600 letters

How much of correspondence cost will be assigned to Department B?

Question 24 options:

	$1,600
	$20,000
	$50,000
	$12,500

Question 25 (4.2 points)

Merriman Company provides the following ABC costing information:

Activities Total Overhead Costs Activity-cost drivers

Account inquiry hours $400,000 10,000 hours

Account billing lines $280,000 4,000,000 lines

Account verification queries $150,000 40,000 queries

Correspondence letters $ 50,000 4,000 letters

Total overhead costs $880,000

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

Activities Department A Department B

Account inquiry hours 2,000 hours 4,000 hours

Account billing lines 400,000 lines 200,000 lines

Account verification queries 10,000 queries 8,000 queries

Correspondence letters 1,000 letters 1,600 letters

How much of the total overhead costs will be assigned to Department A?

Question 25 options:

	$158,000
	$80,000
	$280,000
	$800,000