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Mertens Company provides the following ABC costing information: Activities Total Costs Account inquiry hours $200,000 Account billing lines $140,000 Account verification accounts $75,000 Correspondence letters
Mertens Company provides the following ABC costing information: Activities Total Costs Account inquiry hours $200,000 Account billing lines $140,000 Account verification accounts $75,000 Correspondence letters $ 25,000 Total costs $440,000 Activity-cost drivers 10,000 hours 4,000,000 lines 40,000 accounts 4,000 letters 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 lines 400,000 lines 200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters 1. How much of the account inquiry cost will be assigned to Department A? 2. How much of the account billing cost will be assigned to Department B? 3. How much of the total costs will be assigned to Department A
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