Astro'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 retail division are:
A)$0.
B)$31,200.
C)$118,560.
D)$193,440.
E)$203,000.

Question

Quizplus · Accepted Answer

The costs allocated to the retail division are calculated by first determining the number of calls made for retail, which is 10,000 - 3,800 = 6,200 calls. The cost per call is $312,000 / 10,000 = $31.20. Therefore, the cost allocated to the retail division is 6,200 calls * $31.20 = $193,440.

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