Vancuren Corporation has two operating divisions--an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $31 per shipment. The Logistics Department's fixed costs are budgeted at $274,400 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.

At the end of the year, actual Logistics Department variable costs totaled $215,820 and fixed costs totaled $294,690. The East Division had a total of 3,200 shipments and the West Division had a total of 3,400 shipments for the year.
-How much Logistics Department cost should be allocated to the West Division at the end of the year?

Question

Vancuren Corporation has two operating divisions--an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $31 per shipment. The Logistics Department's fixed costs are budgeted at $274,400 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.

At the end of the year, actual Logistics Department variable costs totaled $215,820 and fixed costs totaled $294,690. The East Division had a total of 3,200 shipments and the West Division had a total of 3,400 shipments for the year.
-How much Logistics Department cost should be allocated to the West Division at the end of the year?

Quizplus · Accepted Answer

The Answer of Vancuren Corporation has two operating divisions--an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $31 per shipment. The Logistics Department's fixed costs are budgeted at $274,400 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.

At the end of the year, actual Logistics Department variable costs totaled $215,820 and fixed costs totaled $294,690. The East Division had a total of 3,200 shipments and the West Division had a total of 3,400 shipments for the year.
-How much Logistics Department cost should be allocated to the West Division at the end of the year?

Vancuren Corporation Has Two Operating Divisions--An East Division and a West