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

question 335

Multiple Choice

Azotea 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 $68 per order. The Order Fulfillment Department's fixed costs are budgeted at $239,700 for the year. The fixed costs of the Order Fulfillment Department are budgeted based on the peak-period orders. At the end of the year, actual Order Fulfillment Department variable costs totaled $249,390 and fixed costs totaled $251,140. The Consumer Division had a total of 1,840 orders and the Commercial Division had a total of 3,460 orders for the year.How much Order Fulfillment Department cost should be allocated to the Commercial Division at the end of the year?

• A) $379,100
• B) $387,798
• C) $411,129
• D) $401,900

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Definitions:

Principal

In legal terms, the main party involved, such as the primary person in a contract or the person who grants authority in a power of attorney.

Agent

A person or entity authorized to act on behalf of another, typically in business or legal matters, and make decisions or take action.

Reimburse

To pay back or compensate for money spent or losses incurred.

Cooperate

The act of working together willingly toward a common goal or purpose, especially in a business or legal context.