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

question 48

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: 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 Consumer Division,assuming the company uses dual-rates to allocate common costs?

• A)$1,200,000.
• B)$1,093,333.
• C)$954,896.
• D)$750,000.

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Definitions:

Assembly Department

A production area focused on assembling parts or components into finished goods.

Materials Costs

The expense incurred by a company for the raw materials used in manufacturing or producing goods.

First-In, First-Out Method

A method of valuing inventory whereby the costs of the first items bought or manufactured are the first ones accounted for in the calculation of the cost of goods sold.

Cost Of Ending Work

The total cost related to the unfinished work or inventory at the end of an accounting period.