Question
Webster Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $250,000 10,000 hours Account billing lines $125,000 5,000,000 lines
Webster Company provides the following ABC costing information:
Activities | Total Costs | Activity-cost drivers |
Account inquiry hours | $250,000 | 10,000 hours |
Account billing lines | $125,000 | 5,000,000 lines |
Account verification accounts | $50,000 | 50,000 accounts |
Correspondence letters | $ 25,000 | 5,000 letters |
Total costs | $450,000 |
|
The above activities are used by Departments A and B as follows:
| Department A | Department B |
Account inquiry hours | 1,000 hours | 3,000 hours |
Account billing lines | 200,000 lines | 300,000 lines |
Account verification accounts | 10,000 accounts | 8,000 accounts |
Correspondence letters | 1,000 letters | 1,500 letters |
How much of account verification costs will be assigned to Department A?
$40,000
$10,000
$50,000
$25,000
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