Barrington Box Enterprises Has Two Divisions,large and Small,that Share the Common

question 101

Multiple Choice

Barrington Box Enterprises has two divisions,large and small,that share the common costs of the company's communications network.The annual common costs are $4,500,000.You have been provided with the following information for the upcoming year:
$$\begin{array} { | l | r | r | } \hline & \text { Calls } & \begin{array} { r } \text { Time on } \\\text { Network (hous) }\end{array} \\\hline \text { Large } & 100,000 & 120,000 \\\hline \text { Small } & 80,000 & 330,000 \\\hline\end{array}$$ What is the allocation rate for the upcoming,year assuming Barrington Box uses the single-rate method and allocates common costs based on the time on the network?

• A) $10.98.
• B) $10.00.
• C) $8.00.
• D) $7.14.

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Definitions:

Discretionary Income

Discretionary income is the amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities have been paid.

Disposable Income

The amount of money an individual or household has available for spending and saving after taxes have been deducted.

Net Income

The total earnings or profit of a business after subtracting all expenses, taxes, and costs.

Discretionary Income

The amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities (like food and shelter) are taken care of.