Pitt Jones Company Had the Following Activities, Allocated Costs, and Allocation

question 26

Multiple Choice

Pitt Jones Company had the following activities, allocated costs, and allocation bases: $$\begin{array} { | l | r | r | } \hline \text { Activities } & \text { Allocated Costs } & \text { Allocation Base } \\\hline \text { Account inquiry (hours) } & \$ 60,000 & 2,000 \text { hours } \\\hline \text { Account billing (lines) } & \$ 30,000 & 20,000 \text { lines } \\\hline \text { Account verification (accounts) } & \$ 15,000 & 20,000 \text { accounts } \\\hline \text { Correspondence (letters) } & \$ 10,000 & 1,000 \text { letters } \\\hline\end{array}$$ The above activities are carried out at two of their regional offices.
$$\begin{array} { | l | r | r | } \hline & \text { Northeast Office } & \text { Midwest Office } \\\hline \text { Account inquiry (hours) } & 100 \text { hours } & 200 \text { hours } \\\hline \text { Account billing (lines) } & 10,000 \text { lines } & 7,000 \text { lines } \\\hline \text { Account verification (accounts) } & 1,000 \text { accounts } & 600 \text { accounts } \\\hline \text { Correspondence (letters) } & 50 \text { letters } & 100 \text { letters } \\\hline\end{array}$$ How much of the account inquiry cost will be assigned to the Midwest Office?

• A) $2,000
• B) $6,500
• C) $3,000
• D) $6,000

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Definitions:

Battery

A civil wrong that occurs when one person intentionally and voluntarily brings about a non-consented harmful or offensive contact with a person or something closely associated with him or her. Battery requires an actual contact.

Consent

A voluntary agreement to another's proposal or to engage in a particular activity.

Duty Of Care

A legal obligation requiring individuals to exercise a standard of reasonable care while performing acts that could foreseeably harm others.

Unforeseeable Risks

Risks that cannot reasonably be anticipated or predicted, often affecting contracts or liability.