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