Question

At the end of the year, actual Logistics Department variable costs totaled $296,700 and fixed costs totaled $437,950. The Atlantic Division had a total of 4,500 shipments and the Pacific Division had a total of 5,700 shipments for the year. How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes

Answer 1

Answer:

The Pacific Division should be charged $ 410,539.70 at the end of the year.

Explanation:

Given that at the end of the year, actual Logistics Department variable costs totaled $ 296,700 and fixed costs totaled $ 437,950, and the Atlantic Division had a total of 4,500 shipments and the Pacific Division had a total of 5,700 shipments for the year, to determine how much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes, the following calculation should be performed:

296,700 + 437,950 = 734,650

4,500 + 5,700 = 10,200

10,200 = 734,650

5,700 = X

5,700 x 734,650 / 10,200 = X

4,187,505,000 / 10,200 = X

410,539.70 = X

Therefore, the Pacific Division should be charged $ 410,539.70 at the end of the year.