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

question 227

Multiple Choice

Erholm 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 $37 per shipment. The Logistics Department's fixed costs are budgeted at $417,800 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year, actual Logistics Department variable costs totaled $296,700 and fixed costs totaled $437,950. The Atlantic Division had a total of 4,500 shipments and the Pacific Division had a total of 5,700 shipments for the year. How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes?

• A) $397,453
• B) $482,470
• C) $451,498
• D) $466,202

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Definitions:

Part-Time Work

Employment that does not provide the full number of hours considered standard or full-time in a given industry, typically involving fewer hours per week.

Taylorism

A management theory emphasizing efficiency, by systematically organizing tasks and breaking them down into small, simple steps.

Primary Labour Market

Involves employment sectors characterized by stable employment, higher wages, and access to benefits and career progression.

Secondary Labour Market

A segment of the job market characterized by low-paying, insecure, non-unionized, and often part-time or temporary work, frequently contrasted with more stable and better-compensated primary employment.