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 $50 per shipment. The Logistics Department's fixed costs are budgeted at $430,800 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. Percentage of Peak Period Capacity Required Budgeted Shipments Atlantic Division 30% 3,800 Pacific Division 70% 7,100 At the end of the year, actual Logistics Department variable costs totaled $309,700 and fixed costs totaled $450,950. The Atlantic Division had a total of 5,800 shipments and the Pacific Division had a total of 7,000 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 $50 per shipment. The Logistics Department's fixed costs are budgeted at $430,800 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.
| Percentage of Peak Period Capacity Required | Budgeted Shipments | |
|---|---|---|
| Atlantic Division | 30% | 3,800 |
| Pacific Division | 70% | 7,100 |
At the end of the year, actual Logistics Department variable costs totaled $309,700 and fixed costs totaled $450,950. The Atlantic Division had a total of 5,800 shipments and the Pacific Division had a total of 7,000 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?
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