How much of account verification costs will be assigned to Department A? Merriman Company provides the following ABC oosting information:ActivitiesAccount inquiry hoursAccount billing linesAccount verification accountsCorrespondence lettersTotal costsTotal Costs$400,000$280,000$150,000$ 50.000$880.000Activity-cost drivers10,000 hours4,000,000 lines40,000 accounts4,000 lettersThe above activities are used by Departments A and B as follows:Account inquiry hoursAccount billing linesAccount verification accountsDepartment A2,000 hours400,000 lines10,000 accounts1,000 lettersDepartment B4,000 hours200,000 lines8,000 accounts1,600 lettersCorrespondence letters

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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

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Financial Institutions and Federal Bank

The word financial institution is a kind of business organization that deals with the financial activities of a nation. These activities include accepting deposits, making payments, granting loans and advances, transferring funds, holding shares, providing credits, purchasing and selling foreign exchanges, investments in shares, futures commodities, and many more.

Question

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

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