Macumber Corporation Has Two Operating Divisions-An Atlantic Division and a Pacific

question 122

Multiple Choice

Macumber Corporation has two operating divisions-an Atlantic Division and a Pacific Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $36 per shipment. The Logistics Department's fixed costs are budgeted at $234,000 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. How much Logistics Department cost should be charged to the Atlantic Division at the end of the year for performance evaluation purposes?

• A) $198,000
• B) $109,800
• C) $118,800
• D) $96,800

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Definitions:

Risk Bearing

The acceptance of the possibility of loss on an investment or business venture, along with the responsibility of managing and mitigating potential risks.

Usury Law

Regulations governing the amount of interest that can be charged on a loan, intended to protect borrowers from exorbitant rates.

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Usury Laws

Legal statutes regulating the maximum interest rates that can be charged on loans, aimed at preventing predatory lending practices.