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

question 60

Multiple Choice

Fenway 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: Fenway Telcom uses the single rate method and allocates common costs based on the number of connections.What is the total computer server network cost allocated to the Commercial Division?

• A)$480,000.
• B)$514,286.
• C)$600,000.
• D)$1,200,000.

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Definitions:

Annual Accounting Period

A 12-month timeframe over which a company measures its financial performance and prepares financial statements.

Chart of Accounts

A structured list of all the financial accounts in the general ledger of a company, organizing financial transactions during an accounting period.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the correct period.

Insurance Premium

The amount paid for an insurance policy, typically charged monthly or annually, for the duration of the policy.