Mesa Telcom Has Three Divisions,commercial,retail,and Consumer,that Share the Common Costs

question 12

Multiple Choice

Mesa Telcom has three divisions,commercial,retail,and consumer,that share the common costs of the company's computer server network.The annual common costs are $2,400,000.You have been provided with the following information for the upcoming year:
$$\begin{array} { | l | r | r | } \hline & \text { Connections } & \begin{array} { r } \text { Time on } \\\text { Network (hous) }\end{array} \\\hline \text { Commercial } & 60,000 & 120,000 \\\hline \text { Retail } & 80,000 & 150,000 \\\hline \text { Consumer } & 100,000 & 330,000 \\\hline\end{array}$$ What is the allocation rate for the upcoming year,assuming Mesa Telcom uses the single-rate method and allocates common costs based on the number of connections?

• A) $10.00.
• B) $15.00.
• C) $20.00.
• D) $40.00.

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