Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company’s communications network, which are $8,200,000 a year. You have the following information about the two divisions and the common communications network: Calls (thousands) Time on Network (hours) Air express 553,000 360,000 Ground service 237,000 1,080,000 Required: Determine the cost allocation if $4.92 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.)
Bartolo Delivery has two divisions, air express and ground service, that share the common costs of the company’s communications network, which are $8,200,000 a year. You have the following information about the two divisions and the common communications network: Calls (thousands) Time on Network (hours) Air express 553,000 360,000 Ground service 237,000 1,080,000 Required: Determine the cost allocation if $4.92 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $8,200,000 a year. You have the following information about the two divisions and the common communications network:
| Calls (thousands) | Time on Network (hours) | |||||
| Air express | 553,000 | 360,000 | ||||
| Ground service | 237,000 | 1,080,000 | ||||
Required:
Determine the cost allocation if $4.92 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.)
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