Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company’s communications network, which are $8,100,000 a year. You have the following information about the two divisions and the common communications network:     Calls (thousands) Time on Network (hours) Air express   623,000     337,500   Ground service   267,000     1,012,500       Required: Determine the cost allocation if $5.67 million of the communications network costs are fixed and allocated on the basis of time on network, and the remaining costs, which are variable, are allocated on the basis of the number of calls. (Enter your answers in whole dollars.  Do not round intermediate calculations.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company’s communications network, which are $8,100,000 a year. You have the following information about the two divisions and the common communications network:

 

  Calls (thousands) Time on Network (hours)
Air express   623,000     337,500  
Ground service   267,000     1,012,500  
 

 

Required:

Determine the cost allocation if $5.67 million of the communications network costs are fixed and allocated on the basis of time on network, and the remaining costs, which are variable, are allocated on the basis of the number of calls. (Enter your answers in whole dollars.  Do not round intermediate calculations.)

Air Express
Ground Service
Fixed
Variable
Total
Transcribed Image Text:Air Express Ground Service Fixed Variable Total
Time on Network
Calls (thousands)
(hours)
337,500
1,012,500
Air express
623,000
267,000
Ground service
Transcribed Image Text:Time on Network Calls (thousands) (hours) 337,500 1,012,500 Air express 623,000 267,000 Ground service
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