Question
Maine Industries has two divisions, North and South. You are given the following information about the costs of four activities that occur at corporate headquarters:
Maine Industries has two divisions, North and South. You are given the following information about the costs of four activities that occur at corporate headquarters:
Activity | Total Costs | Activity-cost drivers | |
Managing accounts payable | $200,000 | 4,000 invoices | |
Managing human resources | 210,000 | 700 employees | |
Managing accounts receivable | 150,000 | 3,000 accounts | |
Managing computer network | 250,000 | 500 computers | |
| Total costs | $810,000
|
|
The above activities are used by the two divisions as follows:
| North Division | South Division |
Number of invoices | 1,500 invoices | 2,500 invoices |
Number of employees | 300 employees | 400 employees |
Accounts receivable accounts | 2,000 accounts | 1,000 accounts |
Number of computers | 200 computers | 300 computers |
How much of the Computer Network cost will be allocated to the South Division?
$100,000 | ||
$150,000 | ||
$75,000 | ||
$50,000 |
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