Levar Corporation Has Two Operating Divisions-A Consumer Division and a Commercial

question 247

Multiple Choice

Levar Corporation has two operating divisions-a Consumer Division and a Commercial Division. The company's Order Fulfillment Department provides services to both divisions. The variable costs of the Order Fulfillment Department are budgeted at $73 per order. The Order Fulfillment Department's fixed costs are budgeted at $470,400 for the year. The fixed costs of the Order Fulfillment Department are determined based on the peak period orders. At the end of the year, actual Order Fulfillment Department variable costs totaled $621,600 and fixed costs totaled $473,970. The Consumer Division had a total of 1,840 orders and the Commercial Division had a total of 6,560 orders for the year. For purposes of evaluation performance, how much Order Fulfillment Department cost should be charged to the Commercial Division at the end of the year?

• A) $831,680
• B) $855,588
• C) $840,918
• D) $846,240

---

Definitions:

Identical Twins

Twins that are genetically identical, resulting from the splitting of a single fertilized egg.

Adoptive Mom

A woman who has become a parent through the legal process of adoption, establishing a parent-child relationship with a child to whom she is not biologically related.

Biological Mom

A term referring to a woman who has genetically contributed to the creation and birth of a child.

Adopted Sibling

An adopted sibling is a brother or sister who has become part of a family through the legal process of adoption, rather than by birth.