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