(Appendix 11B) Wollan Corporation Has Two Operating Divisions--An East Division

question 3

Multiple Choice

(Appendix 11B) Wollan Corporation has two operating divisions--an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $44 per shipment. The Logistics Department's fixed costs are budgeted at $237,600 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 $332,880 and fixed costs totaled $253,960. The East Division had a total of 4,300 shipments and the West Division had a total of 3,000 shipments for the year.
-How much actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?

• A) $28,040
• B) $0
• C) $16,360
• D) $11,680

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Definitions:

Denatured Alcohol

Ethanol that has additives to make it poisonous, bad-tasting, foul-smelling, or nauseating, to discourage recreational consumption.

Balanced Equation

A chemical equation in which the number of atoms for each element is the same on both the reactant and product sides, indicating matter conservation.

NaCl

Sodium chloride, commonly known as table salt, an essential compound for both dietary and industrial uses.

Reaction Type

A category defining the nature of chemical reactions based on the rearrangement of atoms and changes in their bonding.