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

question 78

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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The cost accountant determined $1,700,000 of the server network's costs were fixed and should be allocated based on the number of connections. The remaining costs should be allocated based on the time on the network. What is total server network costs allocated to the Consumer Division (rounded to the nearest whole dollar) , assuming the company uses dual-rates to allocate common costs?

• A) $1,200,000.
• B) $1,093,333.
• C) $954,896.
• D) $750,000.