Barrington Box Enterprises Has Two Divisions, Large and Small, That

question 119

Multiple Choice

Barrington Box Enterprises has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $4,500,000. You have been provided with the following information for the upcoming year:
$$\begin{array} { | l | r | c | } \hline & { \text { Calls } } &{ \text { Time on Network (hours) } } \\\hline \text { Large } & 100,000 &120,000 \\\hline \text { Small } & 80,000 & 320,000 \\\hline\end{array}$$

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What is the allocation rate for the upcoming, year assuming Barrington Box uses the single-rate method and allocates common costs based on the time on the network ?

• A) $10.98.
• B) $10.00.
• C) $8.00.
• D) $7.14.

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Definitions:

Conditional

A statement that establishes a cause-and-effect relationship between two propositions.

Disjunct

Used in logic to refer to an either/or proposition where two options are presented and at least one of them must be true.

Disjunction

A logical operator that results in truth if at least one of its components is true.

Contingency

An event or condition that is possible but cannot be predicted with certainty, often dependent on other events happening.