The Western and Pacific Railroad Has Two Divisions,the Western Division

question 39

Multiple Choice

The Western and Pacific Railroad has two divisions,the Western Division and the Pacific Division.The company recently invested $8,000,000 to maintain its railroad track.Pertinent data for the two divisions are as follows: Total Miles Traveled: $\begin{array}{|l|l|}\hline \text { Western Division } & 800,000 \text { miles } \\\hline \text { Pacific Division } & 1,200,000 \text { miles } \\\hline\end{array}$ The amount of track improvement cost that should be allocated to the Western Division is: (Do not round your intermediate calculations. )

• A) $4,000,000.
• B) $3,200,000.
• C) $800,000.
• D) $5,333,333.

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Definitions:

Job Order

A request or instruction to perform a specific task, often used in manufacturing or service industries to track costs and work.

Equivalent Units

Equivalent units are a concept in cost accounting used to allocate costs to partially completed goods, treating them as if they were a certain number of fully completed units.

Job Order

A custom or production order that specifies the details for manufacturing a certain product or products for a customer.

Process Cost

The cost associated with a production process, allocated to products based on the process they go through rather than being directly traced to the product itself.