Bell, Biv, and Devoe Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $85,200 2,200 Account billing (lines) $55,000 34,000 Account verification (accounts) $39,250 25,500 Correspondence (letters) $71,000 9,000 The company uses activity-based costing. The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 400 800 Account billing (lines) 10,000 4,000 Account verification (accounts) 6,000 7,000 Correspondence (letters) 1,000 2,000 What is the cost per driver unit for the account inquiry activity? (Round all answers to two decimal places.) $1.62 $9.47 $7.89 $38.73
Bell, Biv, and Devoe Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $85,200 2,200 Account billing (lines) $55,000 34,000 Account verification (accounts) $39,250 25,500 Correspondence (letters) $71,000 9,000 The company uses activity-based costing. The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 400 800 Account billing (lines) 10,000 4,000 Account verification (accounts) 6,000 7,000 Correspondence (letters) 1,000 2,000 What is the cost per driver unit for the account inquiry activity? (Round all answers to two decimal places.) $1.62 $9.47 $7.89 $38.73
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
- Bell, Biv, and Devoe Company had the following activities, estimated indirect activity costs, and allocation bases:
|
Activities |
Indirect Activity Costs |
Allocation Base |
|
Account inquiry (hours) |
$85,200 |
2,200 |
|
Account billing (lines) |
$55,000 |
34,000 |
|
Account verification (accounts) |
$39,250 |
25,500 |
|
Correspondence (letters) |
$71,000 |
9,000 |
The company uses activity-based costing.
The above activities are used by Departments P and Q as follows:
|
|
Department P |
Department Q |
|
Account inquiry (hours) |
400 |
800 |
|
Account billing (lines) |
10,000 |
4,000 |
|
Account verification (accounts) |
6,000 |
7,000 |
|
Correspondence (letters) |
1,000 |
2,000 |
What is the cost per driver unit for the account inquiry activity? (Round all answers to two decimal places.)
- $1.62
- $9.47
- $7.89
- $38.73
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