Calculation of a cost charged to a projectthe logistics

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Calculation of a cost charged to a project.

The Logistics Department serves two operating divisions-an Atlantic Division and a Pacific Division. The variable costs of the Logistics Department are budgeted at $36 per shipment. The Logistics Department's fixed costs are budgeted at $234,000 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand.

 

Percentage of Peak Period Capacity Required

Actual Shipments

Atlantic Division

30%

1,100

Pacific Division

70%

3,400

How much Logistics Department cost should be charged to the Atlantic Division at the end of the year for performance evaluation purposes?

a)     $198,000

b)    $109,800

c)     $118,800

d)    $96,800

Reference no: EM13355837

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