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Premium Company provides the following ABC costing information: Activities Total Costs drivers Activity-cost Account inquiry $200,000 6,500 hours Account billing $140,000 650,000 lines Account verification
Premium Company provides the following ABC costing information: Activities Total Costs drivers Activity-cost Account inquiry $200,000 6,500 hours Account billing $140,000 650,000 lines Account verification accounts $75,000 16,000 accounts Correspondence letters $ 25,000 3,000 letters Total costs $440,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,500 hours 4,000 hours Account billing lines 400,000 lines 250,000 lines Account verification accounts 10,000 accounts 6,000 accounts Correspondence letters 1,200 letters 1,800 letters How much of correspondence costs will be assigned to Department B? Select one: a. $4,000 b. $6,250 c. $15,000 d. $10,000
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