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bernie2981 bernie2981
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8 years ago
Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:

Activities   Indirect Activity Costs   Allocation Base
Account inquiry (hours)   $86,400   2,700
Account billing (lines)   $56,000   32,000
Account verification (accounts)   $38,250   25,500
Correspondence (letters)   $80,000   10,000

Potter & Weasley uses activity based costing.

The above activities are used by Departments P and Q as follows:

   Department P   Department Q
Account inquiry (hours)   400   800
Account billing (lines)   10,000   4,000
Account verification (accounts)   6,000   7,000
Correspondence (letters)   1,000   2,000

How much of the account inquiry cost will be assigned to Department Q?
A) $6,400
B) $25,600
C) $8,000
D) $12,800
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Managerial Accounting

Managerial Accounting


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nucleinuclei
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bernie2981 Author
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#2
8 years ago
Answers my question perfectly.
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