Marazzi 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 $47 per shipment. The Logistics Department's fixed costs are budgeted at $328,600 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 $333,270 and fixed costs totaled $340,240. The East Division had a total of 2,300 shipments and the West Division had a total of 4,600 shipments for the year.
-How much Logistics Department cost should be allocated to the West Division at the end of the year?
A)$462,650
B)$477,360
C)$435,267
D)$449,007

Question

Marazzi 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 $47 per shipment. The Logistics Department's fixed costs are budgeted at $328,600 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 $333,270 and fixed costs totaled $340,240. The East Division had a total of 2,300 shipments and the West Division had a total of 4,600 shipments for the year.
-How much Logistics Department cost should be allocated to the West Division at the end of the year?
A)$462,650 
B)$477,360 
C)$435,267 
D)$449,007

Quizplus · Accepted Answer

According to the table, the Logistics Department cost for the West Division is $462,650. This is the amount that should be allocated to the West Division at the end of the year.

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