Pound Industries' customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 10,000 calls and incurred costs of $312,000. Of these calls, 3,800 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the wholesale operation are:
A) $0.
B) $31,200.
C) $118,560.
D) $193,440.
E) $203,000.

Question

Quizplus · Accepted Answer

The costs allocated to the wholesale operation can be calculated based on the proportion of calls related to the wholesale operation. With 3,800 out of 10,000 calls being for the wholesale operation, this represents 38% of the total calls. Therefore, 38% of the total costs ($312,000) would be allocated to the wholesale operation: $312,000 * 0.38 = $118,560.

Pound Industries' Customer Service Department Follows Up on Customer Complaints