(Q.6) Mertens Company provides the following ABC costing information: Activities Account inquiry hours Total Costs $200,000 $140,000 Account verification accounts $75,000 Account billing lines Correspondence letters Total costs $ 25,000 $440,000 Activity-cost drivers 10,000 hours) 4,000,000 lines 40,000 accounts 4,000 letters The above activities are used by Departments A and B as follows: Account inquiry hours Account billing lines Account verification accounts Correspondence letters a. Calculate the cost allocation rates. Department A 2,000 hours 400,000 lines 10,000 accounts 1,000 letters Department B 4,000 hours 200,000 lines 8,000 accounts 1,600 letters Activity Account inquiry Account billing Account verification Correspondence b. Allocate the activity costs to the departments. Activity Account inquiry Account billing Account verification Correspondence Total costs Allocation Rate Allocated costs Department A Department B