Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry S320,000 16,000 hours Account billing $200,000 4,000,000 lines Account verification accounts $173,250 70,000 accounts Correspondence letters $24,000 4,000 letters Total costs $717,250 The above activities are used by Departments A and Bas follows: Department A Department B Account inquiry hours 2,700 hours 4,200 hours Account billing lines 950,000 lines 750,000 lines Account verification accounts 8,500 accounts 6,500 accounts Correspondence letters 1,400 letters 1,800 letters How much of the account billing cost will be assigned to Department A?
Extreme Manufacturing Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry S320,000 16,000 hours Account billing $200,000 4,000,000 lines Account verification accounts $173,250 70,000 accounts Correspondence letters $24,000 4,000 letters Total costs $717,250 The above activities are used by Departments A and Bas follows: Department A Department B Account inquiry hours 2,700 hours 4,200 hours Account billing lines 950,000 lines 750,000 lines Account verification accounts 8,500 accounts 6,500 accounts Correspondence letters 1,400 letters 1,800 letters How much of the account billing cost will be assigned to Department A?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Extreme Manufacturing Company provides the following ABC costing information:
Activities
Total Costs
Activity-cost drivers
Account inquiry
$320,000
16,000 hours
Account billing
$200,000
4,000,000 lines
Account verification accounts
$173,250
70,000 accounts
Correspondence letters
$24,000
4,000 letters
Total costs
S717,250
The above activities are used by Departments A and B as follows:
Department A
Department B
Account inquiry hours
2,700 hours
4,200 hours
Account billing lines
950,000 lines
750,000 lines
Account verification accounts
8,500 accounts
6,500 accounts
Correspondence letters
1,400 letters
1,800 letters
How much of the account billing cost will be assigned to Department A?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fda869df5-01d2-4a6a-a946-415268979e8f%2F7790d8a3-823f-4e41-a9cf-7439ca451d74%2F1m3nha4_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Extreme Manufacturing Company provides the following ABC costing information:
Activities
Total Costs
Activity-cost drivers
Account inquiry
$320,000
16,000 hours
Account billing
$200,000
4,000,000 lines
Account verification accounts
$173,250
70,000 accounts
Correspondence letters
$24,000
4,000 letters
Total costs
S717,250
The above activities are used by Departments A and B as follows:
Department A
Department B
Account inquiry hours
2,700 hours
4,200 hours
Account billing lines
950,000 lines
750,000 lines
Account verification accounts
8,500 accounts
6,500 accounts
Correspondence letters
1,400 letters
1,800 letters
How much of the account billing cost will be assigned to Department A?
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