Wollan Corporation has two operating divisions--an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $44 per shipment. The Logistics Department's fixed costs are budgeted at $237,600 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 $332,880 and fixed costs totaled $253,960. The East Division had a total of 4,300 shipments and the West Division had a total of 3,000 shipments for the year.
How much Logistics Department cost should be allocated to the West Division at the end of the year?
A) $289,176
B) $229,644
C) $241,167
D) $274,560

Question

Wollan Corporation has two operating divisions--an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $44 per shipment. The Logistics Department's fixed costs are budgeted at $237,600 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 $332,880 and fixed costs totaled $253,960. The East Division had a total of 4,300 shipments and the West Division had a total of 3,000 shipments for the year.
How much Logistics Department cost should be allocated to the West Division at the end of the year?
A) $289,176 
B) $229,644 
C) $241,167 
D) $274,560

Quizplus · Accepted Answer

11eacbfc_c7c5_6170_8ffe_590deb8ce49a_TB7552_00

Wollan Corporation Has Two Operating Divisions--An East Division and a West