Merriman Company provides the following Activity-based Costing (ABC costing) information for 201X:

	Estimated	Estimated
	Overhead	Activity Measure Level
Activity (Cost Pool)	Costs	(Allocation Base)
Account inquiry hours	$400,000	10,000	Hours
Account billing lines	$280,000	4,000,000	Lines
Account verification	$150,000	40,000	Accounts
Correspondence letters	$50,000	4,000	Letters
Total overhead costs	$880,000

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

	ACTUAL
	Activity Measure Level
Activity (Cost Pool)	Dept. A	Dept. B
Account inquiry hours	2,000	4,000	hours
Account billing lines	400,000	200,000	lines
Account verification	10,000	8,000	accounts
Correspondence letters	1,000	1,600	letters

1- What is the activity cost rate of the Account billing lines activity cost pool (rounded to the nearest penny, if necessary)?

a. $.70 per billing line

b. $.47 per billing line

c. $.07 per billing line

d. $1.40 per billing line

2- What is the activity cost rate of the Correspondence letters activity cost pool (rounded to the nearest penny, if necessary)?

a. $19.23 per letter

b. $31.25 per letter

c. $50.00 per letter

d. $12.50 per letter