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

question 3

Multiple Choice

Wentz 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 $56 per order. The Order Fulfillment Department's fixed costs are budgeted at $190,800 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 $206,640 and fixed costs totaled $202,680. The Consumer Division had a total of 1,240 orders and the Commercial Division had a total of 2,360 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) $257,240
• B) $246,640
• C) $268,332
• D) $257,072

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Definitions:

Variances

Statistical measures that represent the extent to which a set of numbers is spread out from their average value.

Portfolio

A grouping of investment tools like equities, bonds, raw goods, actual cash, and assets similar to cash, which also comprises mutual funds and ETFs.

Joint Probability Distribution

A mathematical description of the likelihood of two events occurring together and at the same point in time.

Car Salespeople

Individuals specialized in selling automobiles, often working at car dealerships.