Question
Barrington Box Enterprises has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $4,680,000.
Barrington Box Enterprises has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $4,680,000. You have been provided with the following information for the upcoming year:
Calls Time on Network (hours)
Large 118,200 146,000
Small 78,800 219,000
The cost accountant determined $2,600,000 of the communication network's costs were fixed and should be allocated based on the number of calls. The remaining costs should be allocated based on the time on the network. What is the total communication network costs allocated to the Large Box Division, assuming the company uses dual-rates to allocate common costs?
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