Cannata Corporation Has Two Operating Divisions--A North Division and a South

question 32

Essay

Cannata Corporation has two operating divisions--a North Division and a South Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $32 per shipment. The Logistics Department's fixed costs are budgeted at $372,300 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 $335,000 and fixed costs totaled $382,850. The North Division had a total of 4,700 shipments and the South Division had a total of 5,300 shipments for the year.
Required:
a. Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year.
b. How much of the actual Logistics Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

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Definitions:

Dysfunctional Transactions

Interactions within relationships that are unhealthy or hinder the emotional development or well-being of the individuals involved.

Emotional Fixations

Persistent focus on an emotional issue or feeling that impedes emotional development or well-being.

Mental Disorders

Conditions characterized by significant disturbances in an individual’s cognition, emotion regulation, or behavior, often associated with distress or impaired functioning.

Economic Justice

The concept or philosophy that aims for fairness and equity within the economy, ensuring all individuals have access to opportunities and resources.