Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $85,700 2600 Account billing (lines) $55,000 35,000 Account verification (accounts) $40,250 27,500 Correspondence (letters) $80,000 12,000Potter & Weasley uses activity based costing.
Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $85,700 2600 Account billing (lines) $55,000 35,000 Account verification (accounts) $40,250 27,500 Correspondence (letters) $80,000 12,000Potter & Weasley uses activity based costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:
Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:
How much of the account inquiry cost will be assigned to Department Q?
| Activities | Indirect Activity Costs | Allocation Base |
| Account inquiry (hours) | $85,700 | 2600 |
| Account billing (lines) | $55,000 | 35,000 |
| Account verification (accounts) | $40,250 | 27,500 |
| Correspondence (letters) | $80,000 | 12,000 |
The above activities are used by Departments P and Q as follows:
| | Department P | Department Q |
| Account inquiry (hours) | 200 | 1000 |
| Account billing (lines) | 10,000 | 4,000 |
| Account verification (accounts) | 6,000 | 7,000 |
| Correspondence (letters) | 1,000 | 2,000 |
Question 15 options:
|
|
$1318
|
|
|
$32,962
|
|
|
$6592
|
|
|
$13,000
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education