Answer the Following Questions Using the Information Below:
Katoomba Company

question 198

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 total costs will be assigned to Department A?

• A)$195 500
• B)$228 000
• C)$880 000
• D)$80 000

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Definitions:

Constraints

Limitations or restrictions that impact the decision-making process, often used in the context of optimization problems and project planning.

Feasible Region

Within optimization challenges, the collection of all feasible points that meet the criteria of the problem.

Linear Programming

A mathematical methodology for determining the best outcome in a given mathematical model for some list of requirements represented as linear relationships.

Constrained Resources

Resources in limited supply that restrict the ability of an organization to produce goods or services or achieve desired outcomes.