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

question 116

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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:
 Calls  Time on Network (hours)   Large 100,000120,000 Small 80,000320,000\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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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 total communication network costs allocated to the Small Box Division, assuming the company uses dual-rates to allocate common costs?

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