Aladin's customer service department follows up on customer complaints by telephone inquiry.During a recent period,the department initiated 7,000 calls and incurred costs of $203,000.If 2,940 of these calls were for the company's wholesale operation (the remainder were for the retail division),costs allocated to the wholesale operation should amount to:
A)$0.
B)$29.
C)$85,260.
D)$117,740.
E)$203,000.

Question

Quizplus · Accepted Answer

To allocate the costs to the wholesale operation, we need to find out the proportion of calls made for the wholesale operation.

Proportion of calls for wholesale operation = 2,940 / 7,000 = 0.42

Now, we can allocate the costs as follows:

Costs allocated to wholesale operation = Proportion of calls for wholesale operation * Total costs
= 0.42 * $203,000
= $85,260

Therefore, the costs allocated to the wholesale operation should be $85,260.

Aladin's Customer Service Department Follows Up on Customer Complaints by Telephone