Myoung Company, a manufacturer of small appliances, had the following activities, allocated costs, and allocation bases
Activities Allocated Costs Allocation Base
Account inquiry (hours) $61,000 2,400 hours
Account billing (lines) $35,000 17,000 lines
Account verification (accounts) $13,000 20,000 accounts
Correspondence (letters) $11,000 1,000 letters
The above activities are carried out at two of its regional offices.
Activities Northeast Office Midwest Office
Account inquiry (hours) 120 hours 250 hours
Account billing (lines) 16,000 lines 9,000 lines
Account verification (accounts) 1,500 accounts 600 accounts
Correspondence (letters) 70 letters 150 letters
What is the cost per hour for the account inquiry activity? (Round your answer to the nearest cent.)
A) $0.65
B) $25.42
C) $11.00
D) $2.06
B .B)
Total cost of account inquiry $61,000
Quantity of allocation base (hours) 2,400
Cost of account inquiry per hour ($61,000 / 2,400 ) $25.42
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