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

\begin{array} { | l | r | r | } \hline \text { Activities } & \text { Indirect Activity Costs } & \text { Allocation Base } \\\hline \text { Account inquiry (hours) } & \$ 75,000 & 2,500 \\\hline \text { Account billing (lines) } & \$ 45,000 & 30,000 \\\hline \text { Account verification (accounts) } & \$ 18,000 & 24,000 \\\hline \text { Correspondence (letters) } & \$ 40,000 & 4,000 \\\hline\end{array}

Hinckley & Granger uses activity based costing.
The above activities are used by Departments P and Q as follows:

\begin{array} { | l | r | r | } \hline & \text { Department P } & \text { Department Q } \\\hline \text { Account inquiry (hours) } & 300 & 600 \\\hline \text { Account billing (lines) } & 8,000 & 6,000 \\\hline \text { Account verification (accounts) } & 5,000 & 4,500 \\\hline \text { Correspondence (letters) } & 500 & 600 \\\hline\end{array}

- How much of the correspondence cost will be assigned to Department P?
A)$5,000
B)$6,000
C)$ 375
D)$3,750

Which of the Following Is TRUE About a Lean Production

Multiple Choice