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Q1) Logistics Department serves two operating divisions-Atlantic Division and Pacific Division. Variable costs of Logistics Department are budgeted at $36 per shipment. Logistics Department's fixed costs are budgeted at $234,000 for year. Fixed costs of Logistics Department are found out based on peak-period demand.

   Percentage of Peak Period Capacity Required Actual Shipments
Atlantic Division 30% 1,100
Pacific Division 70% 3,400

How much Logistics Department cost must be charged to Atlantic Division at the ending of year for performance evaluation purposes?

a) $198,000

b) $109,800

c) $118,800

d) $96,800

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M918203

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