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

question 181

Multiple Choice

Flannery Company,a manufacturer of small appliances,had the following activities,allocated costs,and allocation bases: $$\begin{array} { | l | l | l | } \hline { \text { Activities } } & { \text { Allocated Costs } } & { \text { Allocation Base } } \\\hline \text { Account inquiry (hours) } & \$ 67,000 & 2500 \text { hours } \\\hline \text { Account billing (lines) } & \$ 34,000 & 18,000 \text { lines } \\\hline \text { Account verification (accounts) } & \$ 14,000 & 25,000 \text { accounts } \\\hline \text { Correspondence (letters) } & \$ 11,000 & 1000 \text { letters } \\\hline\end{array}$$ The above activities are carried out at two of its regional offices.
$$\begin{array} { | l | l | l | } \hline { \text { Activities } } & \text { Northeast Office } & \text { Midwest Office } \\\hline \text { Account inquiry (hours) } & 160 \text { hours } & 300 \text { hours } \\\hline \text { Account billing (lines) } & 14,000 \text { lines } & 3000 \text { lines } \\\hline \text { Account verification (accounts) } & 1200 \text { accounts } & \text { 700 accounts } \\\hline \text { Correspondence (letters) } & 30 \text { letters } & 130 \text { letters } \\\hline\end{array}$$ What is the cost per letter for the correspondence activity? (Round your answer to the nearest cent.)

• A) $11.00
• B) $34.00
• C) $4.40
• D) $0.56

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