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

question 24

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:
$$\begin{array} { | l | r | r | } \hline & \text { Connections } & \begin{array} { r } \text { Time on } \\\text { Network (hous) }\end{array} \\\hline \text { Commercial } & 60,000 & 120,000 \\\hline \text { Retail } & 80,000 & 150,000 \\\hline \text { Consumer } & 100,000 & 330,000 \\\hline\end{array}$$ The cost accountant determined $1,700,000 of the server network's costs were fixed and should be allocated based on the number of connections.The remaining costs should be allocated based on the time on the network.What is total server network costs allocated to the Retail Division,assuming the company uses dual-rates to allocate common costs?

• A) $741,667.
• B) $657,143.
• C) $425,000.
• D) $211,765.

---

Definitions:

Patient's Husband

The spouse of an individual receiving medical care or treatment.

Interrupts

Signals that temporarily halt the normal execution of a program or device operation in order to process a higher priority task.

Back-channeling

The use of non-verbal cues and short verbal responses to indicate that one is listening and understanding in a communication situation.

Understand

The ability to grasp the meaning, significance, or nature of something.