Question - Fran Ferry Company had the following activities, pooled costs, and physical flow of driver units. The company uses activity minus-based costing.
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Activities
|
Pooled Costs
|
Physical Flow of Driver Units
|
|
Account inquiry (hours)
|
$200,000
|
5,000 hours
|
|
Account billing (lines)
|
$140,000
|
2,000,000 lines
|
|
Account verification (accounts)
|
$5,000
|
20,000 accounts
|
|
Correspondence (letters)
|
$25,000
|
2,000 letters
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The above activities are used by departments A and B as follows:
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A
|
B
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|
Account inquiry (hours)
|
1,000
|
2,000
|
|
Account billing (lines)
|
200,000
|
100,000
|
|
Account verification (accounts)
|
5,000
|
4,000
|
|
Correspondence (letters)
|
500
|
800
|
How much of the account billing cost will be assigned to Department B?