Extreme Manufacturing Company provides the following ABC costing information: Activities ...
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Accounting
Extreme Manufacturing Company provides the following ABC costing information:
| Activities | Total Costs | Activity dash cost drivers | |
| Account inquiry | $420,000 | 14,000 hours | |
| Account billing | $140,000 | 7,000,000 lines | |
| Account verification accounts | $148,500 | 60,000 accounts | |
| Correspondence letters | $32,500 | 5,000 letters |
| Total costs | $741,000 |
The above activities are used by Departments A and B as follows: A B
| Account inquiry hours | 2,200 hours | 3,700 hours | |
| Account billing lines | 800,000 lines | 650,000 lines | |
| Account verification accounts | 7,000 accounts | 5,000 accounts | |
| Correspondence letters | 1,000 letters | 1,400 letters |
How much of correspondence costs will be assigned to Department A?
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