Q4/Mertens Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $200,000 10,000 hours Account billing lines $140,000 4,000,000 lines Account verification accounts $75,000 $ 25,000 $440,000 Correspondence letters Total costs 40,000 accounts 4,000 letters The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,000 hours Account billing lines 400,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters How much of account verification costs will be assigned to Department A? A.$15,000 B.$18,750 C.$75,000 D.$5,000 4,000 hours 200,000 lines
Q4/Mertens Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $200,000 10,000 hours Account billing lines $140,000 4,000,000 lines Account verification accounts $75,000 $ 25,000 $440,000 Correspondence letters Total costs 40,000 accounts 4,000 letters The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,000 hours Account billing lines 400,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters How much of account verification costs will be assigned to Department A? A.$15,000 B.$18,750 C.$75,000 D.$5,000 4,000 hours 200,000 lines
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Q4/Mertens Company provides the following ABC costing information:
Activities
Total Costs
Activity-cost drivers
Account inquiry hours
10,000 hours
Account billing lines
4,000,000 lines
Account verification accounts
Correspondence letters
Total costs
$200,000
$140,000
$75,000
$ 25,000
$440,000
40,000 accounts
4,000 letters
The above activities are used by Departments A and B as follows:
Department A
Department B
A.$15,000
B.$18,750
C.$75,000
D.$5,000
Account inquiry hours
2,000 hours
Account billing lines.
400,000 lines
Account verification accounts 10,000 accounts
8,000 accounts
Correspondence letters
1,000 letters
1,600 letters
How much of account verification costs will be assigned to Department A?
4,000 hours
200,000 lines
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