Potter & Weasley Company Had the Following Activities,estimated Indirect Activity

question 238

Multiple Choice

Potter & Weasley Company had the following activities,estimated indirect activity costs,and allocation bases:

Potter & Weasley uses activity based costing.
The above activities are used by Departments P and Q as follows:

How much of the correspondence cost will be assigned to Department P?

• A)$16,000
• B)$9,000
• C)$8,000
• D)$1,500

---

Definitions:

Capital Budgeting

The process of planning and evaluating investments in long-term assets to determine which projects will generate the most profitable returns.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, making the expense predictable and consistent.

Income Taxes

Taxes levied by governments on individuals' or businesses' net income, where the amount owed varies based on the level of the income earned.

Operating Cash Inflow

Cash generated from a company's primary business operations, excluding non-operational sources like investments or financing.