Winnie Company had the following activities, traceable costs, and physical flow of driver units: Activities Account inquiry (hours) Traceable Costs Physical Flow of Driver $400,000 $280,000 10,000 hours Account billing (lines) lines Account Verification (accounts) $150,000 Correspondence (hours) $50,000 4,000,000 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 4,000 hours Account billing (lines) 400,000 lines 200,000 lines Account Verification (accounts) 10,000 accounts 8,000 accounts Correspondence (hours) 1,000 letters 1,600 letters How much of the account inquiry cost will be assigned to Department A? A. $160,000 B. none of the above C. $400,000 D. $80,000

Winnie Company had the following activities, traceable costs, and physical flow of driver units: Activities Account inquiry (hours) Traceable Costs Physical Flow of Driver $400,000 $280,000 10,000 hours Account billing (lines) lines Account Verification (accounts) $150,000 Correspondence (hours) $50,000 4,000,000 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 4,000 hours Account billing (lines) 400,000 lines 200,000 lines Account Verification (accounts) 10,000 accounts 8,000 accounts Correspondence (hours) 1,000 letters 1,600 letters How much of the account inquiry cost will be assigned to Department A? A. $160,000 B. none of the above C. $400,000 D. $80,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 8E: Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the...

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Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
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