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Premium Company Provides the Following ABC Costing Information The Above Activities Are Used by Departments a and B

question 134

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Premium Company provides the following ABC costing information:
 Activities  Total Costs  Activity-cost drivers  Account inquiry $200,00010,000 hours  Account billing $140,0004,000,000 lines  Account verificationaccounts $75,00040,000 accounts  Correspondence letters $25,0004,000 letters  Total costs $440,000\begin{array} { l r c } \text { Activities } & \text { Total Costs } & \text { Activity-cost drivers } \\\text { Account inquiry } & \$ 200,000 & 10,000 \text { hours } \\\text { Account billing } & \$ 140,000 & 4,000,000 \text { lines } \\\text { Account verificationaccounts } & \$ 75,000 & 40,000 \text { accounts } \\\text { Correspondence letters } & \$ 25,000 & 4,000 \text { letters } \\\text { Total costs } & \$ 440,000 &\end{array} The above activities are used by Departments A and B as follows:
 Department A Department B Account inquiry hours 2,500 hours 4,000 hours  Account billing lines 400,000 lines 250,000 lines  Account verification accounts 10,000 accounts 8,000 accounts  Correspondence letters 1,200 letters 1,600 letters \begin{array} { l c c } & \text { Department } \mathrm { A } & \text { Department } \mathrm { B } \\\text { Account inquiry hours } & 2,500 \text { hours } & 4,000 \text { hours } \\\text { Account billing lines } & 400,000 \text { lines } & 250,000 \text { lines } \\\text { Account verification accounts } & 10,000 \text { accounts } & 8,000 \text { accounts } \\\text { Correspondence letters } & 1,200 \text { letters } & 1,600 \text { letters }\end{array}
-How much of correspondence costs will be assigned to Department A?

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