The Cost Accountant Determined $2,700,000 of the Communication Network's Costs

question 15

Multiple Choice

The cost accountant determined $2,700,000 of the communication network's costs were fixed and should be allocated based on the number of calls.The remaining costs should be allocated based on the time on the network.What is the total communication network costs allocated to the Large Box Division assuming the company uses dual-rates to allocate common costs?

• A)$2,700,000
• B)$2,520,000
• C)$1,980,000
• D)$1,500,000

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Definitions:

Inflation

The pace at which prices for various goods and services climb, diminishing the value of money to buy them.

Storage Costs

Expenses associated with keeping goods stored in a warehouse or other facility until they are sold or used.

Interest Rate

The interest rate a borrower incurs for the money lent to them by a lender.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.