Packages-2-Go has two divisions, air express and ground service, that share the common costs of the company's communications network, which are $5,110,000 a year. You have the following information about the two divisions and the common communications network:

	Calls (thousands)	Time on Network (hours)
Air express	152,000	123,000
Ground service	101,000	504,000

Required:

(a)	What is the communications network cost that is charged to each division if the number of calls is used as the allocation basis? (Do not round intermediate calculations. Round final answers to the nearest dollar amounts. Omit the "$" sign in your response.)

Division		Network cost
Air express	$
Ground service	$

(b)	What is the communications network cost to each division using time on network as the allocation basis? (Do not round intermediate calculations. Round final answers to the nearest dollar amounts. Omit the "$" sign in your response.)

Division		Network cost
Air express	$
Ground service	$

(c)	The cost of the communications network is necessary regardless of which division uses it. Is the method of allocation important?
	(Click to select)NoYes