1. 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?

Answer rating: 100% (QA)

To assign the total costs to Department A and Department B we need to allocate the costs based on the activitycost drivers provided We can calculate t... View the full answer