Question
Premium Company provides the following ABC costing information:ActivitiesTotal CostsActivity-cost driversAccount inquiry$200,0006,500 hoursAccount billing$140,000650,000 linesAccount verification accounts$75,00020,000accountsCorrespondence letters$ 25.0002,800lettersTotal costs$440.000The above activities are used by Departments
Premium Company provides the following ABC costing information:ActivitiesTotal CostsActivity-cost driversAccount inquiry$200,0006,500 hoursAccount billing$140,000650,000 linesAccount verification accounts$75,00020,000accountsCorrespondence letters$ 25.0002,800lettersTotal costs$440.000The above activities are used by Departments A and B as follows:ActivitiesDepartment ADepartment BAccount inquiry hours2,500 hours4,000 hoursAccount billing lines400,000 lines250,000 linesAccount verification accounts12,000accounts8,000 accountsCorrespondence letters 1,200letters1,600 lettersHow much of account verification costs will be assigned to Department A?
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