Charley's Products Allocates Telephone Expenses Based on a Variable Rate

question 54

Multiple Choice

Charley's Products allocates telephone expenses based on a variable rate of $1 per phone call.It allocates the fixed monthly charge equally over its budgeted usage.Able Division expected to make 300 telephone calls,but actually made 350.Baker Division expected to make 300 telephone calls,but actually made 250.Actual fixed costs for the month totaled $3,000.What are the amounts allocated to the two divisions using a dual rate of allocation?

• A)Able Division = $2,259,Baker Division = $1,291
• B)Able Division = $2,209,Baker Division = $1,391
• C)Able Division = $1,850,Baker Division = $1,750
• D)Able Division = $1,800,Baker Division = $1,800

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