Premium Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $200,000 10,000 hours Account billing $140,000 4,000,000 lines Account verification accounts $75,000 40,000 accounts Correspondence letters $ 25,000 4,000 letters Total costs $440,000 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 400,000 lines 250,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,200 letters 1,600 letters 1- How much of account verification costs will be assigned to Department A? 2- How much of the total costs will be assigne
Premium Company provides the following ABC costing information:
Activities Total Costs Activity-cost drivers
Account inquiry $200,000 10,000 hours
Account billing $140,000 4,000,000 lines
Account verification accounts $75,000 40,000 accounts
Correspondence letters $ 25,000 4,000 letters
Total costs $440,000
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 400,000 lines 250,000 lines
Account verification accounts 10,000 accounts 8,000 accounts
Correspondence letters 1,200 letters 1,600 letters
1- How much of account verification costs will be assigned to Department A?
2- How much of the total costs will be assigned to department B?
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