Boulay Corporation has two operating divisions-a North Division and a South Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $34 per shipment.The Logistics Department's fixed costs are budgeted at $175,000 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $147,840 and fixed costs totaled $189,610.The North Division had a total of 2,100 shipments and the South Division had a total of 2,100 shipments for the year.
Required:
a.Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year.
b.How much of the actual Logistics Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

Question

Boulay Corporation has two operating divisions-a North Division and a South Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $34 per shipment.The Logistics Department's fixed costs are budgeted at $175,000 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand.  At the end of the year,actual Logistics Department variable costs totaled $147,840 and fixed costs totaled $189,610.The North Division had a total of 2,100 shipments and the South Division had a total of 2,100 shipments for the year.
Required:
a.Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year.
b.How much of the actual Logistics Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

Quizplus · Accepted Answer

The Answer of Boulay Corporation has two operating divisions-a North Division and a South Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $34 per shipment.The Logistics Department's fixed costs are budgeted at $175,000 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand.  At the end of the year,actual Logistics Department variable costs totaled $147,840 and fixed costs totaled $189,610.The North Division had a total of 2,100 shipments and the South Division had a total of 2,100 shipments for the year.
Required:
a.Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year.
b.How much of the actual Logistics Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

Boulay Corporation Has Two Operating Divisions-A North Division and a South