Gandolf Manufacturing provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $390,000 13,000 hours Account billing $275,000 5,000,000 lines Account verification accounts $130,500 60,000 accounts Correspondence letters $22,000 4,000 letters Total costs $817,500 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,500 hours 4,000 hours Account billing lines 800,000 lines 650,000 lines Account verification accounts 9,000 accounts 7,000 accounts Correspondence letters 2,000 letters 2,400 letters Required: How much of correspondence costs will be assigned to Department A? a. $11,000 b. $49,500 c. $22,000 d. $11,242
Gandolf Manufacturing provides the following ABC costing information:
Activities Total Costs Activity-cost drivers
Account inquiry $390,000 13,000 hours
Account billing $275,000 5,000,000 lines
Account verification accounts $130,500 60,000 accounts
Correspondence letters $22,000 4,000 letters
Total costs $817,500
The above activities are used by Departments A and B as follows:
Department A Department B
Account inquiry hours 2,500 hours 4,000 hours
Account billing lines 800,000 lines 650,000 lines
Account verification accounts 9,000 accounts 7,000 accounts
Correspondence letters 2,000 letters 2,400 letters
Required: How much of correspondence costs will be assigned to Department A?
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