John Gordan Company had the following activities, traceable costs, and physical flow of driver units:
The above activities are used by departments A and B as follows:

-How much of the account billing cost will be assigned to Department B?
A) $14,000
B) $140,000
C) $7,000
D) None of the above

Question

John Gordan Company had the following activities, traceable costs, and physical flow of driver units:
  The above activities are used by departments A and B as follows:
 
-How much of the account billing cost will be assigned to Department B?
A) $14,000 
B) $140,000 
C) $7,000 
D) None of the above

Quizplus · Accepted Answer

The account billing cost is a traceable cost related to activity 3. Department B uses this activity 50% of the time, so 50% of the traceable cost ($14,000) will be assigned to Department B. Thus, the correct answer is (C) $7,000.

John Gordan Company Had the Following Activities, Traceable Costs, and Physical