Erholm Corporation Has Two Operating Divisions-An Atlantic Division and a Pacific

Multiple Choice

Erholm Corporation has two operating divisions-an Atlantic Division and a Pacific Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $37 per shipment. The Logistics Department's fixed costs are budgeted at $417,800 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year, actual Logistics Department variable costs totaled $296,700 and fixed costs totaled $437,950. The Atlantic Division had a total of 4,500 shipments and the Pacific Division had a total of 5,700 shipments for the year. How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes?

A) $397,453
B) $482,470
C) $451,498
D) $466,202