(Appendix 12B)Yacavone Corporation Has Two Operating Divisions-A Consumer Division and a Commercial

question 5

Multiple Choice

(Appendix 12B) Yacavone Corporation has two operating divisions-a Consumer Division and a Commercial Division.The company's Customer Service Department provides services to both divisions.The variable costs of the Customer Service Department are budgeted at $43 per order.The Customer Service Department's fixed costs are budgeted at $274, 400 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 $216, 090 and fixed costs totaled $292, 890.The Consumer Division had a total of 1, 310 orders and the Commercial Division had a total of 3, 590 orders for the year.For performance evaluation purposes, how much actual Customer Service Department cost should NOT be charged to the operating divisions at the end of the year?

• A)$18, 490
• B)$5, 390
• C)$23, 880
• D)$0

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Definitions:

Aggregate Demand

Aggregate demand is the total demand for all goods and services in an economy at a given overall price level and in a given time period.

Active Stabilization Policy

Government policies aimed at reducing economic fluctuations through fiscal and monetary actions.

Fiscal Policy

Government policies related to taxation and spending that aim to influence economic conditions.

Monetary Policy

The set of actions by a central bank or monetary authority to control the supply of money and interest rates in its economy.