Answer the Following Questions Using the Information Below:
Katoomba Company

question 8

Multiple Choice

Answer the following questions using the information below:
Katoomba Company provides the following ABC costing information:
$$\begin{array}{l}\begin{array} { l c l } \text { Activities } & \text { Total Costs } & \text { Activity-cost Drivers } \\\text { Account inquiry hours } & \$ 800000 & 20000 \text { hours } \\\text { Account billing lines } & \$ 560000 & 8000 \text { 000 lines } \\\text { Account verification accounts } & \$ 300000 & 80000 \text { accounts } \\\text { Correspondence letters } & \$ 100000 & 8000 \text { letters } \\\quad \text { Total costs } & \$ 1760000 &\end{array}\\\\\text { The above activities are uæed by Departments } \mathrm { A } \text { and } \mathrm { B } \text { as follows: }\\\\\begin{array} { l l l } & \text { Department A } & \text { Department B } \\\text { Account inquiry hours } & 2000 \text { hours } & 8000 \text { hours } \\\text { Account billing lines } & 400 \text { o00 lines } & 200000 \text { lines } \\\text { Account verification accounts } & 20000 \text { accounts } & 8000 \text { accounts } \\\text { Correspondence letters } & 1000 \text { letters } & 1600 \text { letters }\end{array}\end{array}$$
-How much of the correspondence costs will be assigned to Department B?

• A)$100 000
• B)$1600
• C)$12 500
• D)$20 000

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Definitions:

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