How much of account verification costs will be assigned to Department A?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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How much of account verification costs will be assigned to Department A?
Transcribed Image Text:How much of account verification costs will be assigned to Department A?
Merriman Company provides the following ABC oosting information:
Activities
Account inquiry hours
Account billing lines
Account verification accounts
Correspondence letters
Total costs
Total Costs
$400,000
$280,000
$150,000
$ 50.000
$880.000
Activity-cost drivers
10,000 hours
4,000,000 lines
40,000 accounts
4,000 letters
The above activities are used by Departments A and B as follows:
Account inquiry hours
Account billing lines
Account verification accounts
Department A
2,000 hours
400,000 lines
10,000 accounts
1,000 letters
Department B
4,000 hours
200,000 lines
8,000 accounts
1,600 letters
Correspondence letters
Transcribed Image Text:Merriman Company provides the following ABC oosting information: Activities Account inquiry hours Account billing lines Account verification accounts Correspondence letters Total costs Total Costs $400,000 $280,000 $150,000 $ 50.000 $880.000 Activity-cost drivers 10,000 hours 4,000,000 lines 40,000 accounts 4,000 letters The above activities are used by Departments A and B as follows: Account inquiry hours Account billing lines Account verification accounts Department A 2,000 hours 400,000 lines 10,000 accounts 1,000 letters Department B 4,000 hours 200,000 lines 8,000 accounts 1,600 letters Correspondence letters
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