Premium Company provides the following ABC costing information: How much of correspondence costs will be assigned to Department A?

QUESTION 2 Premium Company provides the following ABC costing information: Activities Account inquiry Account billing Account verification accounts Correspondence letters Total costs Total Costs $100,000 $385,000 $159,250 $43,750 $688,000 Activity-cost drivers 10,000 hours 7,000,000 lines 70,000 accounts 7000 letters The above activities are used by Departments A and B as follows: Account inquiry hours Account billing lines Account verification accounts Correspondence letters Department A 2900 hours 600,000 lines 11,000 accounts 1100 letters Department B 4400 hours 450,000 lines 9000 accounts 1500 letters How much of correspondence costs will be assigned to Department A? $68,750 $6875 $43,750 $7150