Multiple Choice
(Appendix 11B) Azotea 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 $56 per order. The Order Fulfillment Department's fixed costs are budgeted at $233,700 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 $237,390 and fixed costs totaled $239,140. The Consumer Division had a total of 1,240 orders and the Commercial Division had a total of 2,860 orders for the year.
-How much actual Order Fulfillment Department cost should not be allocated to the operating divisions at the end of the year?
A) $7,790
B) $5,440
C) $13,230
D) $0
Correct Answer:
Verified
Correct Answer:
Verified
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