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

question 23

Multiple Choice

Higuera 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 $28 per order. The Order Fulfillment Department's fixed costs are budgeted at $280,800 for the year. The fixed costs of the Order Fulfillment Department are budgeted based on the peak period orders. At the end of the year, actual Order Fulfillment Department variable costs totaled $152,810 and fixed costs totaled $286,580. The Consumer Division had a total of 1,720 orders and the Commercial Division had a total of 3,460 orders for the year.
-How much Order Fulfillment Department cost should be allocated to the Commercial Division at the end of the year?

• A)$284,441
• B)$274,018
• C)$293,492
• D)$265,360

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Definitions:

Independence Test

A statistical procedure used to determine if two or more variables are independent of each other.

Row and Column Factors

In a matrix or a table, the variables or conditions that are represented by the rows and columns, important for analysis of variance and other statistical methods.

Observed Values

The actual data or outcomes that have been collected or measured in a study.

Confidence Interval

A range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter.