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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?
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.
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