Calculation of a cost charged to a project.
The Logistics Department serves two operating divisions-an Atlantic Division and a Pacific Division. The variable costs of the Logistics Department are budgeted at $36 per shipment. The Logistics Department's fixed costs are budgeted at $234,000 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.
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Percentage of Peak Period Capacity Required
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Actual Shipments
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Atlantic Division
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30%
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1,100
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Pacific Division
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70%
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3,400
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How much Logistics Department cost should be charged to the Atlantic Division at the end of the year for performance evaluation purposes?
a) $198,000
b) $109,800
c) $118,800
d) $96,800