Potter Weasley Company had the following activities estimat

Potter? & Weasley Company had the following? activities, estimated indirect activity? costs, and allocation? bases: Activities Indirect Activity Costs Allocation Base Account inquiry? (hours) $ 86 comma 900 2 comma 000 Account billing? (lines) $ 52 comma 000 34 comma 000 Account verification? (accounts) $ 36 comma 250 24 comma 500 Correspondence? (letters) $ 87 comma 000 11 comma 000 Potter? & Weasley uses activity based costing. The above activities are used by Departments P and Q as? follows: Department P Department Q Account inquiry? (hours) 400 800 Account billing? (lines) ?10,000 6 comma 000 Account verification? (accounts) ?6,000 ?7,000 Correspondence? (letters) ?1,000 ?2,000 What is the cost per driver unit for the account verification? activity? (Round all answers to two decimal? places.)

Solution

The cost per driver unit for the account verification? activity is:

= $36,250 / 24,500

= $1.48