Evaluation of a cost charged to a project

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Reference no: EM1311133

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: EM1311133

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