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

question 41

Multiple Choice

Sheinberg 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 $73 per order. The Order Fulfillment Department's fixed costs are budgeted at $425,000 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 $635,485 and fixed costs totaled $443,380. The Consumer Division had a total of 2,340 orders and the Commercial Division had a total of 6,190 orders for the year.

-How much Order Fulfillment Department cost should be allocated to the Commercial Division at the end of the year?

• A)$760,281
• B)$749,352
• C)$728,120
• D)$782,904

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Definitions:

Gasoline

A flammable liquid derived from petroleum, used mainly as fuel in most internal combustion engines.

Perfectly Inelastic

A situation where the quantity demanded or supplied of a good is unaffected by changes in its price.

Upward-Sloping

A term often used in economics to describe a graph line that represents an increase in one variable as another variable increases, typically applied to supply curves.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.