Harrow Corporation had the following activities, traceable costs, and physical flow of driver units: • Customer service (hours): $450,000 total cost, 12,500 hours • Order processing (orders): $320,000 total cost, 4,500,000 orders • Account verification (accounts): $160,000 total cost, 42,000 accounts Correspondence (letters): $55,000 total cost, 5,500 letters The above activities are used by Department X and Department Y as follows: • Customer service hours: 3,200 hours (Department X), 5,400 hours (Department Y) • Order processing orders: 500,000 orders (Department X), 250,000 orders (Department Y) . Account verification accounts: 11,000 accounts (Department X), 9,000 accounts (Department Y) • Correspondence letters: 1,400 letters (Department X), 1,900 letters (Department Y) How much of the customer service cost will be assigned to Department X?

Harrow Corporation had the following activities, traceable costs, and physical flow of driver units: • Customer service (hours): $450,000 total cost, 12,500 hours • Order processing (orders): $320,000 total cost, 4,500,000 orders • Account verification (accounts): $160,000 total cost, 42,000 accounts Correspondence (letters): $55,000 total cost, 5,500 letters The above activities are used by Department X and Department Y as follows: • Customer service hours: 3,200 hours (Department X), 5,400 hours (Department Y) • Order processing orders: 500,000 orders (Department X), 250,000 orders (Department Y) . Account verification accounts: 11,000 accounts (Department X), 9,000 accounts (Department Y) • Correspondence letters: 1,400 letters (Department X), 1,900 letters (Department Y) How much of the customer service cost will be assigned to Department X?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 8E: Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the...

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