Use the Information Below to Answer the Following Question(s)

question 70

Multiple Choice

Use the information below to answer the following question(s) .Fran Ferry Company had the following activities, pooled costs, and physical flow of driver units.The company uses activity-based costing. The above activities are used by departments A and B as follows:

-How much of the account inquiry cost will be assigned to Department A?

• A)$200,000
• B)$80,000
• C)$66,667
• D)$133,334
• E)$40,000

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Definitions:

Materials Cost

The cost of raw materials used to produce goods.

Process Costing

A method of costing that is used in industries where production is continuous and the product is indistinguishable from unit to unit.

Equivalent Units

A concept used in cost accounting to represent the amount of work done on partially finished goods, converted into the number of fully finished units.

Conversion Costs

The combination of labor and manufacturing overhead costs required to transform raw materials into finished products.