Alaina's customer service department follows up on customer complaints by telephone inquiry.During a recent period,the department initiated 10,000 calls and incurred costs of $312,000.Of these calls,3,800 were for the company's wholesale operation;the remainder were for the retail division.Costs allocated to the wholesale operation are:
A)$0.
B)$31,200.
C)$118,560.
D)$193,440.
E)$203,000.

Question

Quizplus · Accepted Answer

To allocate costs to the wholesale division, we need to calculate the percentage of calls made to wholesale relative to the total number of calls made.

Percentage of calls to wholesale division = (3,800/10,000) x 100% = 38%

Therefore, the cost allocated to the wholesale operation is 38% of the total cost incurred:

Cost allocated to wholesale division = 38% x $312,000 = $118,560.

Thus, the best choice is C.

Alaina's Customer Service Department Follows Up on Customer Complaints by Telephone