The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $8,600,000 to maintain its railroad track. Pertinent data for the two divisions are as follows:Total Miles Traveled: $\begin{array}{lr}
\text { Western Division } & 860,000 \mathrm{miles} \
\text { Pacific Division } & 1,260,000 \mathrm{miles}
\end{array}$
The amount of track improvement cost that should be allocated to the Western Division is: (Round intermediate calculation to 2 decimal places.)
A) $5,819,333.
B) $3,491,600.
C) $4,300,000.
D) $860,000.

Question

The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $8,600,000 to maintain its railroad track. Pertinent data for the two divisions are as follows:Total Miles Traveled: $\begin{array}{lr}
\text { Western Division } & 860,000 \mathrm{miles} \
\text { Pacific Division } & 1,260,000 \mathrm{miles}
\end{array}$
 The amount of track improvement cost that should be allocated to the Western Division is: (Round intermediate calculation to 2 decimal places.)
A) $5,819,333.
B) $3,491,600.
C) $4,300,000.
D) $860,000.

Quizplus · Accepted Answer

The cost should be allocated based on the miles traveled by each division.

The Western Division traveled 7,200 miles out of the total 11,660 miles traveled by both divisions.

Therefore, the Western Division's share of the cost is:

$8,600,000 x (7,200/11,660) = $5,319,600

Rounded to 2 decimal places, the answer is $3,491,600.