Flannery Company,a Manufacturer of Small Appliances,had the Following Activities,allocated Costs,and

question 116

Multiple Choice

Flannery Company,a manufacturer of small appliances,had the following activities,allocated costs,and allocation bases: $$\begin{array} { | l | r | r | } \hline \text { Activities } & \text { Allocated Costs } & \text { Allocation Base } \\\hline \text { Account inquiry (hours) } & \$ 79,000 & 3000 \text { hours } \\\hline \text { Account billing (lines) } & \$ 31,000 & 17,000 \text { lines } \\\hline \text { Account verification (accounts) } & \$ 12,000 & 25,000 \text { accounts } \\\hline \text { Correspondence (letters) } & \$ 11,000 & 1400 \text { letters } \\\hline\end{array}$$ The above activities are carried out at two of its regional offices.
$$\begin{array} { | l | r | r | } \hline \text { Activities } & \text { Northeast Office } & \text { Midwest Office } \\\hline \text { Account inquiry (hours) } & 120 \text { hours } & 300 \text { hours } \\\hline \text { Account billing (lines) } & 10,000 \text { lines } & 7000 \text { lines } \\\hline \text { Account verification (accounts) } & 1500 \text { accounts } & 700 \text { accounts } \\\hline \text { Correspondence (letters) } & 60 \text { letters } & 110 \text { letters } \\\hline\end{array}$$ What is the cost per letter for the correspondence activity? (Round your answer to the nearest cent.)

• A)$7.86
• B)$22.14
• C)$3.67
• D)$0.48

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Definitions:

Month-to-Month Tenant

A renter who occupies a property with a lease that renews on a monthly basis rather than a fixed term longer than one month.

Storage Locker

A unit designed for the safekeeping of personal or commercial belongings, usually rentable at self-storage facilities.

Order of Eviction

A legal document issued by a court that directs a tenant to vacate a property within a specified timeframe due to violations such as non-payment of rent or breach of lease terms.

Breach of Contract

The violation of any of the agreed-upon terms and conditions of a binding contract, which may give rise to legal consequences for the party in breach.