Janner Corporation Has Two Operating Divisions-A Consumer Division and a Commercial

question 27

Multiple Choice

Janner Corporation has two operating divisions-a Consumer Division and a Commercial Division.The company's Order Fulfillment Department provides services to both divisions.The variable costs of the Order Fulfillment Department are budgeted at $79 per order.The Order Fulfillment Department's fixed costs are budgeted at $302,500 for the year.The fixed costs of the Order Fulfillment Department are determined based on the peak period orders. At the end of the year,actual Order Fulfillment Department variable costs totaled $446,016 and fixed costs totaled $320,930.The Consumer Division had a total of 1,540 orders and the Commercial Division had a total of 3,980 orders for the year.For purposes of evaluation performance,how much Order Fulfillment Department cost should be charged to the Commercial Division at the end of the year?

• A)$526,170
• B)$546,235
• C)$532,527
• D)$552,979

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Definitions:

IRR

Internal Rate of Return; a metric used in capital budgeting to estimate the profitability of potential investments.

MIRR

Modified Internal Rate of Return, a measure used in capital budgeting to estimate the profitability of potential investments.

NPV

Net Present Value, a calculation used to determine the present value of an investment's cash inflows and outflows over time.

IRR

Internal Rate of Return, a metric used in financial analysis to estimate the profitability of potential investments.