Blake's Manufacturing Company provides the following ABC costing information: Activities
Question:
- Blake's Manufacturing Company provides the following ABC costing information:
Activities Total Costs Activity-cost drivers
Account inquiry $280,000 14,000 hours
Account billing $350,000 7,000,000 lines
Account verification accounts $93,750 50,000 accounts
Correspondence letters $29,000 4,000 letters
Total costs $752,750
The above activities are used by Departments A and B as follows:
Department A Department B
Account inquiry hours 2,100 hours 3,600 hours
Account billing lines 500,000 lines 350,000 lines
Account verification accounts 7,000 accounts 5,000 accounts
Correspondence letters 1,200 letters 1,600 letters
Required
How much of the total costs will be assigned to Department A?
How much of the total cost will be assigned to Department B?
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott