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

question 114

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 correspondence cost will be assigned to the Northeast Office?

• A) $500
• B) $1,200
• C) $2,500
• D) $800

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Definitions:

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, marked by significant technological advancements and changes in economic practices.

Nuclear Family

A household consisting of a parent or parents and their dependent children, regarded as a basic social unit.

Extended Family

An extended family is a familial grouping that extends beyond the immediate family to include grandparents, aunts, uncles, and other relatives.

Structural Functionalist

A perspective in sociology that views society as a complex system whose parts work together to promote solidarity and stability.