Mesa Telcom Has Three Divisions, Commercial, Retail, and Consumer, That

question 131

Multiple Choice

Mesa Telcom has three divisions, commercial, retail, and consumer, that share the common costs of the company's computer server network. The annual common costs are $2,400,000. You have been provided with the following information for the upcoming year:
$$\begin{array} { | l | r | r | } \hline & \text { Connections } & { \text { Time on Network (hours) } } \\\hline \text { Commercial } & 60,000 & 120,000 \\\hline \text { Retail } & 80,000 & 150,000 \\\hline \text { Consumer } & 100,000 & 330,000 \\\hline\end{array}$$
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What is the allocation rate for the upcoming year, assuming Mesa Telcom uses the single-rate method and allocates common costs based on the time on the network?

• A) $20.00.
• B) $16.00.
• C) $4.00.
• D) $2.86.

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Definitions:

Customer Satisfaction

The measure of how products or services provided by a company meet or exceed the expectations of its customers.

RFID

Short for Radio-Frequency Identification, a technology used for tagging and identification of items using radio waves, commonly used in tracking inventory and assets.

Procurement Processes

The activities involved in obtaining goods or services, including selection, purchasing, and contract management, to meet organizational needs.

Warehouse

A large commercial building for storing goods, often used by manufacturers, importers, exporters, wholesalers, and transport businesses.