Krikorian Corporation Has Two Operating Divisions-An Atlantic Division and a Pacific

question 14

Multiple Choice

Krikorian Corporation has two operating divisions-an Atlantic Division and a Pacific Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $37 per shipment. The Logistics Department's fixed costs are budgeted at $330,600 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.
How much Logistics Department cost should be charged to the Altlantic Division at the end of the year for performance evaluation purposes?

• A) $198,840
• B) $272,600
• C) $169,200
• D) $218,080

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Definitions:

Organizational Expenses

Costs incurred in the creation of a corporation or business entity, including legal fees, state incorporation fees, and promotional expenses.

Legal Fees

Costs incurred for legal services provided by attorneys or law firms to individuals or organizations.

Par Value

A nominal or face value assigned to a share of stock or bond, indicating its worth at the time of issue.

Common Stock

Common stock is a form of corporate equity ownership, a type of security representing an ownership interest in a corporation.