Ocon Corporation Has Two Operating Divisions-An Inland Division and a Coast

question 20

Essay

Ocon Corporation has two operating divisions-an Inland Division and a Coast Division. The company's Customer Service Department provides services to both divisions. The variable costs of the Customer Service Department are budgeted at $28 per order. The Customer Service Department's fixed costs are budgeted at $372,300 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 $212,284 and fixed costs totaled $381,740. The Inland Division had a total of 1,710 orders and the Coast Division had a total of 5,560 orders for the year.
Required:
a. Prepare a report showing how much of the Customer Service Department's costs should be charged to each of the operating divisions at the end of the year.
b. How much of the actual Customer Service Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

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Definitions:

Bromine

A dark red, volatile element of the halogen group, used in a variety of compounds and applications, including flame retardants and photography.

Reactive Intermediate Species

Highly reactive molecules or ions formed transiently in the course of a chemical reaction, which go on to react further to form the final products.

Sp3 Hybridization

A form of orbital hybridization in which one s orbital and three p orbitals mix to form four equivalent sp3 hybrid orbitals, typically found in tetrahedral molecular geometries.

Monochlorinated Products

Chemical compounds obtained by adding a single chlorine atom to a molecule, often as intermediates in organic synthesis or in the production of insecticides and solvents.