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

question 154

Multiple Choice

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

• A) $50,000
• B) $200,000
• C) $60,000
• D) $80,000

Differentiate between short-run and long-run decision-making in purely competitive markets.

Recognize the conditions under which firms enter or exit the market.

Comprehend the relationship between price, average total cost, and marginal cost in long-run equilibrium.

Analyze the impact of consumer demand changes on market equilibrium in different types of industries.

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Definitions:

Reaction

A method where reactants are converted into distinct substances known as products.

Organic Product(s)

Compounds containing carbon that are outcomes of chemical processes.

Reaction

An interaction among substances that results in the creation of new substances, each with unique chemical formulas and properties.

Organic Product(s)

Chemical compounds consisting primarily of carbon and hydrogen, which are the result of organic reactions.