Aladdin'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 costs to wholesale operation:
1. Find the percentage of calls made for wholesale operation:
   2,940 / 7,000 = 0.42 or 42%
   
2. Allocate costs based on the percentage:
   $203,000 x 0.42 = $85,260
   
Therefore, costs allocated to the wholesale operation is $85,260.

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