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Erholm 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
Erholm 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 $33 per shipment. The Logistics Department's fixed costs are budgeted at $413,800 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. Atlantic Division Pacific Division Percentage of Peak Period Capacity Required 40% 60% Budgeted Shipments 2,100 5,400 At the end of the year, actual Logistics Department variable costs totaled $292,700 and fixed costs totaled $433,950. The Atlantic Division had a total of 4,100 shipments and the Pacific Division had a total of 5,300 shipments for the year. How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes?
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