Scuderi Corporation Has Two Operating Divisions-An Inland Division and a Coast

question 28

Essay

Scuderi Corporation has two operating divisions-an Inland Division and a Coast Division. The company's Customer Service Department provides services to both divisions. The variable costs of the Customer Service Department are budgeted at $29 per order. The Customer Service Department's fixed costs are budgeted at $381,600 for the year. The fixed costs of the Customer Service Department are determined based on the peak period orders. At the end of the year, actual Customer Service Department variable costs totaled $219,905 and fixed costs totaled $383,860. The Inland Division had a total of 1,520 orders and the Coast Division had a total of 5,690 orders for the year.
Required:
a. Prepare a report showing how much of the Customer Service Department's costs should be charged to each of the operating divisions at the end of the year.
b. How much of the actual Customer Service Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

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Definitions:

Two-sided Message

A communication strategy that presents both the positive and negative aspects of a subject, often used in persuasion to enhance credibility.

Trustworthy

Deserving of trust or confidence, reliable and honest.

Christian Singles

Individuals who identify with the Christian faith and are unmarried, often referring to a specific community or group.

Credibility

The quality of being trusted and believed in, often based on a reputation for honesty or reliability.