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 actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?
A)$31,510
B)$11,220
C)$20,290
D)$0

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 actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?
A)$31,510 
B)$11,220 
C)$20,290 
D)$0

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 actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?
A)$31,510 
B)$11,220 
C)$20,290 
D)$0

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