How much order fulfillment department cost should be

Reference no: EM13566415

Higuera 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 $28 per order. The Order Fulfillment Department's fixed costs are budgeted at $280,800 for the year. The fixed costs of the Order Fulfillment Department are budgeted based on the peak period orders.

Percentage of Peak Period Budgeted Orders

Capacity required
Consumer Division 40% 1,700

Commercial Division 60% 3,500

At the end of the year, actual Order Fulfillment Department variable costs totaled $152,810 and fixed costs totaled $286,580. The Consumer Division had a total of 1,720 orders and the Commercial Division had a total of 3,460 orders for the year.

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

A. $284,441 B. $274,018 C. $293,492 D. $265,360

2. How much actual Order Fulfillment Department cost should not be allocated to the operating divisions at the end of the year?

A. $0
B. $5,780 C. $13,550 D. $7,770

3. Costs which are always relevant in decision making are those costs which are:

A. variable. B. avoidable. C. sunk.D. fixed.

Reference no: EM13566415

Questions Cloud

If 1 million face amount of commercial paper 270 day paper : if 1 million face amount of commercial paper 270 day paper is sold for 982500 what is the simple rate of interest

The balance in the insurance expense account of the : the balance in the insurance expense account of the worksheet was 355. the journal entry to close the insurance expense

Why is the marginal cost of capital the relevant concept : why is the marginal cost of capital the relevant concept for evaluating investment projects rather than a firms actual

The market has had an average annual return of 1450 during : assume that you have been hired as a consultant by cgt a major producer of chemicals and plastics including plastic

How much order fulfillment department cost should be : higuera corporation has two operating divisions-a consumer division and a commercial division. the companys order

Find the present value of 7000 to be received one year : find the present value of 7000 to be received one year from now assuming a 3 percent annual discount interest rate.

Lambert department store is located in midtown metropolis : lambert department store is located in midtown metropolis. during the past several years net income has been declining

At an activity level of 7200 machine-hours in a month falks : at an activity level of 7200 machine-hours in a month falks corporations total variable production engineering cost is

Start with the original assumptions notice that managed : start with the original assumptions. notice that managed care plan 1 receives a much lower price in return for sending

User Account

All Pages