Alamo\'s customer service department follows up on customer complaints by teleph

Question

1. Alamo's customer service department follows up on customer complaints by telephone inquiry.  During a recent period, the department initiated 7,000 calls and incurred costs of $203,000.  If 2,940 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to: $0 $29 $85,260 $117,740 $203,000

Alamo's customer service department follows up on customer complaints by telephone inquiry.  During a recent period, the department initiated 7,000 calls and incurred costs of $203,000.  If 2,940 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to: $0 $29 $85,260 $117,740 $203,000 Alamo's customer service department follows up on customer complaints by telephone inquiry.  During a recent period, the department initiated 7,000 calls and incurred costs of $203,000.  If 2,940 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to: $0 $29 $85,260 $117,740 $203,000 $0 $29 $85,260 $117,740 $203,000

Explanation / Answer

total calls intiated by departement = 7,000 calls

( calls as part of company's wholesale operation =2,940 calls )

( remainder calls as part of retail division = 4,060calls [7,000calls-2,940calls] )

total call costs incurred = $2,03,000

costs allocated to the retail division= $2,03,000*4060 / 7000

                                                                  = $117,740

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