Boulay Corporation Has Two Operating Divisions-A North Division and a South

question 6

Essay

Boulay Corporation has two operating divisions-a North Division and a South Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $34 per shipment.The Logistics Department's fixed costs are budgeted at $175,000 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $147,840 and fixed costs totaled $189,610.The North Division had a total of 2,100 shipments and the South Division had a total of 2,100 shipments for the year.
Required:
a.Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year.
b.How much of the actual Logistics 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?

---

Definitions:

Professional Goals

Career objectives or milestones that individuals aim to achieve in their professional lives.

Organizational Goals

The strategic objectives that an organization aims to achieve in a defined period, guiding its operations and decisions.

Channels of Distribution

The path or route that products and services take from the manufacturer to the final consumer, including all intermediaries.

Channel Member

An entity (such as a distributor, retailer, or wholesaler) that plays a role in moving products or services from the producer to the consumer.