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 $56 per shipment. The Logistics Department's fixed costs are budgeted at $392,500 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 | 35% | 1,550 |
West Division | 65% | 5,550 |
At the end of the year, actual Logistics Department variable costs totaled $434,844 and fixed costs totaled $417,000. The East Division had a total of 2,680 shipments and the West Division had a total of 5,030 shipments for the year.
How much actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?
Multiple Choice
$0
$27,584
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