Reference no: EM132458304
Problem - Merriamn Company provides the following ABC costing information:
Activities Total Costs Activity-cost drivers
Account inquiry hours $400,000 10,000 hours
Account billing lines $280,000 4,000,000 lines
Account verification accounts $150,000 40,000 accounts
Correspondence letters $50,000 4,000 letters
Total costs $880,000
The above activities are used by Department A and B as follows:
Department A Department B
Account inquiry hours 2,000 hours 4,000 hours
Account billing lines 400,000 lines 200,000 lines
Account verification accounts 10,000 accounts 8,000 accounts
Correspondence letters 1,000 letters 1,600 letters
Required - How much of the inquiry cost will be assigned to Department A?
$80,000
$400,000
$160,000
None of the above
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