Erholm Corporation has two operating divisions-an Atlantic Division and a Pacific Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $33 per shipment. The Logistics Department's fixed costs are budgeted at $413,800 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. Atlantic Division Pacific Division Percentage of Peak Period Capacity Required 40% 60% Budgeted Shipments 2,100 5,400 At the end of the year, actual Logistics Department variable costs totaled $292,700 and fixed costs totaled $433,950. The Atlantic Division had a total of 4,100 shipments and the Pacific Division had a total of 5,300 shipments for the year. How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes?

Erholm Corporation has two operating divisions-an Atlantic Division and a Pacific Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $33 per shipment. The Logistics Department's fixed costs are budgeted at $413,800 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. Atlantic Division Pacific Division Percentage of Peak Period Capacity Required 40% 60% Budgeted Shipments 2,100 5,400 At the end of the year, actual Logistics Department variable costs totaled $292,700 and fixed costs totaled $433,950. The Atlantic Division had a total of 4,100 shipments and the Pacific Division had a total of 5,300 shipments for the year. How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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