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

question 32

Multiple Choice

Plaut 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 $55 per order. The Order Fulfillment Department's fixed costs are budgeted at $403,200 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 $409,528 and fixed costs totaled $422,330. The Consumer Division had a total of 1,730 orders and the Commercial Division had a total of 5,480 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)$607,854
• B)$632,258
• C)$583,640
• D)$606,895

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Definitions:

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