Zindell Corporation Has Two Operating Divisions-A North Division and a South

question 5

Essay

Zindell Corporation has two operating divisions-a North Division and a South Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $33 per shipment. The Logistics Department's fixed costs are budgeted at $369,200 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year, actual Logistics Department variable costs totaled $307,050 and fixed costs totaled $374,720. The North Division had a total of 3,900 shipments and the South Division had a total of 5,000 shipments for the year.
Required:
a. Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year.
b. How much of the actual Logistics 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:

Subject Line

A brief line of text that identifies the topic or purpose of an email or document.

Signature

A person's name written in a distinctive way as a form of identification in authorizing documents or correspondence.

Business Letters

Formal letters used for professional correspondence between companies, clients, and other external parties.

Letterhead Stationery

Stationery that includes a printed heading on the paper stating a person's or organization's name and address.