Question

Extreme Manufacturing Company provides the following ABC costing​ information:

Activities	Total Costs	Activity – cost drivers
Account inquiry	$140,000	14,000 hours
Account billing	$280,000	7,000,000 lines
Account verification accounts	$98,750	50,000 accounts
Correspondence letters	$17,250	3,000 letters
Total costs	$536,000

The above activities are used by Departments A and B as​ follows:

	Department A	Department B
Account inquiry hours	2,900 hours	4,400 hours
Account billing lines	800,000 lines	650,000 lines
Account verification accounts	11,000 accounts	9,000 accounts
Correspondence letters	1,200 letters	1,600 letters

How much of the total costs will be assigned to Department​ B?

Answer 1

Formula:

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