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Merriamn Company provides the following ABC costing information:
Merriamn Company provides the following ABC costing information:
Activities
Total Costs
Activity-cost drivers
Account inquiry hours
$400,000
10,000 hours
Account billing lines
$280,000
4,000,000 lines
Account verification accounts
$150,000
40,000 accounts
Correspondence letters
$ 50,000
4,000 letters
Total costs
$880,000
The above activities are used by Department 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 letters
1,000 letters
1,600 letters
How much of the inquiry cost will be assigned to Department A?
$80,000
$400,000
$160,000
None of the above
