Krikorian Corporation has two operating divisions-an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $37 per shipment.The Logistics Department's fixed costs are budgeted at $330,600 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. How much Logistics Department cost should be charged to the Altlantic Division at the end of the year for performance evaluation purposes?
A)$198,840
B)$272,600
C)$169,200
D)$218,080

Question

Krikorian Corporation has two operating divisions-an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $37 per shipment.The Logistics Department's fixed costs are budgeted at $330,600 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand.  How much Logistics Department cost should be charged to the Altlantic Division at the end of the year for performance evaluation purposes?
A)$198,840 
B)$272,600 
C)$169,200 
D)$218,080

Quizplus · Accepted Answer

The amount of cost that would be charged to the Atlantic Division at the end of the year would be as follows:
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Krikorian Corporation Has Two Operating Divisions-An Atlantic Division and a Pacific