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Marazzi Corporation has two operating divisions-an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $38 per shipment. The Logistics Department's fixed costs are budgeted at $419,600 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.

Percentage of Peak Period Capacity Required Budgeted Orders
East Division 30% 1,800
West Division 70% 4,980

At the end of the year, actual Logistics Department variable costs totaled $294,084 and fixed costs totaled $427,000. The East Division had a total of 2,670 shipments and the West Division had a total of 4,890 shipments for the year.How much actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9987472

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