Wollan Corporation Has Two Operating Divisions--An East Division and a West

question 12

Multiple Choice

Wollan Corporation has two operating divisions--an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $44 per shipment. The Logistics Department's fixed costs are budgeted at $237,600 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year, actual Logistics Department variable costs totaled $332,880 and fixed costs totaled $253,960. The East Division had a total of 4,300 shipments and the West Division had a total of 3,000 shipments for the year.
How much actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?

• A) $28,040
• B) $0
• C) $16,360
• D) $11,680

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