Question - Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases:

Activities Indirect Activity Costs Allocation

Base Account inquiry (hours) $86,400 2,700

Account billing (lines) $56,000 32,000

Account verification (accounts) $38,250 25,500

Correspondence (letters) $80,000 10,000

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 4,000

Account verification (accounts) 6,000 7,000

Correspondence (letters) 1,000 2,000

How much of the correspondence cost will be assigned to Department P?

A. $16,000

B. $1,500

C. $8,000

D. $9,000