How much of the account inquiry costs and account billing

Reference no: EM13566205

Merriman Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $400,000 10,000 hours Account billing lines $280,000 4,000,000 lines Account verification accounts $150,000 40,000 accounts Correspondence letters $ 50,000 4,000 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 A. How much of the account inquiry costs and account billing costs will be assigned to Departments A and B? B. How much of the account verification costs and correspondence costs will be assigned to Departments A and B? C. Given the cost data above, if Departments A and B have identical revenue, which department is the most profitable?

Reference no: EM13566205

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