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Premium Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $200,000 10,000 Account billing $140,000 4,000,000 Account verification accounts $75,000

Premium Company provides the following ABC costing information:

Activities

Total Costs

Activity-cost drivers

Account inquiry

$200,000

10,000

Account billing

$140,000

4,000,000

Account verification accounts

$75,000

40,000

Correspondence letters

$ 25,000

4,000

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

1 How much of account verification costs will be assigned to Department A ? 2) How much of correspondence costs will be assigned to Department A? 3) How much of the total costs will be assigned to Department A?

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