Author Question: Hinckley & Granger Company had the following activities, estimated indirect activity costs, and ... (Read 20 times)

iveyjurea · **on:** Jan 4, 2020

Hinckley & Granger Company had the following activities, estimated indirect activity costs, and allocation bases:

Activities	Indirect Activity Costs	Allocation Base
Account inquiry (hours)	$75,000	2,500
Account billing (lines)	$45,000	30,000
Account verification (accounts)	$18,000	24,000
Correspondence (letters)	$40,000	4,000

Hinckley & Granger uses activity based costing.

The above activities are used by Departments P and Q as follows:

	Department P	Department Q
Account inquiry (hours)	300	600
Account billing (lines)	8,000	6,000
Account verification (accounts)	5,000	4,500
Correspondence (letters)	500	600

What is the cost per driver unit for the correspondence activity?
◦ $1.50
◦ $16.00
◦ $10.00
◦ $30.00

joshbk44 · **Reply #1 on:** Jan 4, 2020

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