Question
Wollan Corporation has two operating divisionsan East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics
Wollan Corporation has two operating divisionsan East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $47 per shipment. The Logistics Department's fixed costs are budgeted at $328,600 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. Percentage of Peak-period Capacity Required Budgeted Shipments East Division 25% 1,300 West Division 75% 4,900 At the end of the year, actual Logistics Department variable costs totaled $333,270 and fixed costs totaled $340,240. The East Division had a total of 2,300 shipments and the West Division had a total of 4,600 shipments for the year. How much actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?
a. $8,970
b. $11,640
c. $20,610
d. $0
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