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  3. merriman company provides the following abc costin

Merriman Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers...

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Question

Accounting

Merriman Company provides the following ABC costing information:
Activities Total Costs Activity-cost drivers
Account inquiry hours $400,00010,000 hours
Account billing lines $280,0004,000,000 lines
Account verification accounts $150,00040,000 accounts
Correspondence letters $ 50,0004,000 letters
Total costs $880,000
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 letters 1,000 letters 1,600 letters
How much of the account inquiry cost will be assigned to Department A?
Question 4 options:
$160,000
$80,000
$400,000
None of the above answers is correct.

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