Boxes-2-Go has two divisions, large and small, that share the common costs of th

Question

Boxes-2-Go has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $1,920,000. You have been provided with the following information for the upcoming year:

The cost accountant determined $1,152,000 of the communication network's costs were fixed and should be allocated based on the number of calls. The remaining costs should be allocated based on the time on the network. What is the total communication network costs allocated to the Large Box Division, assuming the company uses dual-rates to allocate common costs?

A. $828,800

B. $1,091,200

C. $624,00

D. $1,152,000

Boxes-2-Go has two divisions, large and small, that share the common costs of the company's communications network. The annual common costs are $1,920,000. You have been provided with the following information for the upcoming year:

Explanation / Answer

A. $828,800 Statement showing computations Particulars Amount Allocation of Fixed Overhead = 1,152,000*65,000/120,000         624,000.00 Allocation of Variable Overhead =(1,920,000 - 1,152,000)*90,000/337,500         204,800.00 Total Overhead allocated         828,800.00

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