Wollan Corporation Has Two Operating Divisions-An East Division and a West

Multiple Choice

Wollan Corporation has two operating divisions-an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $29 per shipment. The Logistics Department's fixed costs are budgeted at $383,900 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 $218,136 and fixed costs totaled $408,000. The East Division had a total of 2,670 shipments and the West Division had a total of 4,650 shipments for the year. How much Logistics Department cost should be allocated to the West Division at the end of the year?

A) $441,970
B) $464,970
C) $414,587
D) $428,327